Trump Proposes Expanded Presidential Control Over Fed

Former President Donald Trump's proposal to give the president a role in setting interest rates has sparked significant concern among economists and financial experts. They argue that this move would undermine the long-standing independence of the Federal Reserve, potentially leading to harmful economic consequences, particularly during election years when presidents may prioritize short-term gains over long-term stability. Bank of America CEO Brian Moynihan emphasized that independent central banks tend to perform better in managing the economy. Trump's running mate, J.D. Vance, supports the proposal, which Trump believes would allow him to better influence monetary policy. Economists, including those from various political backgrounds, warn that such political influence could lead to lower interest rates that might ignite inflation, jeopardizing economic health. The historical context shows that the Fed's independence has contributed to sustained economic growth and low inflation rates since World War II.