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The President can also darkly threaten to take away the independence of the the Federal Reserve if they don't keep rates low to assist in their re-election. Suc
by matthewdgreen 4y ago
The President can also darkly threaten to take away the independence of the the Federal Reserve if they don't keep rates low to assist in their re-election. Such things normally don't happen, but there's no physical barrier to prevent it. [1]
[1] https://www.reuters.com/article/us-usa-fed-trump-tweets/trumps-tweets-threaten-feds-independence-push-rate-expectations-lower-study-idUSKBN1W82II https://www.reuters.com/article/us-usa-fed-trump-tweets/trum...
- UncleEntity 4y agoCongress, maybe, by repealing the federal reserve act. The president doesn’t have the power to just make things up as they go and I’m 99.8% sure the Fed isn’t under the control of the executive branch.
- matthewdgreen 4y agoThe President nominates the Federal Reserve Board with the consent of the Senate. But apparently the law on whether governors can be demoted by the President is unclear and may have to be resolved in Court. Apparently our last President asked his advisors for opinions on doing exactly this (surprise) [1], and like many things in our political system the answer turned out to be something more like "this would be a violation of norms" rather than "it is clearly illegal". So a sufficiently motivated President could do quite a bit to make an uncooperative Fed's life difficult, particularly if they enjoyed a sympathetic Congress and Supreme Court. The potential chaos alone makes threats much more credible. [1] https://archive.ph/y1uEv/again?url=https://www.bloomberg.com/news/articles/2019-06-18/white-house-explored-legality-of-demoting-fed-chairman-powell https://archive.ph/y1uEv/again?url=https://www.bloomberg.com...