Trump Allies Draw Up Plans to Blunt Fed's Independence - WSJ
WASHINGTONDonald Trumps allies are quietly drafting proposals that would attempt to erode the Federal Reserves independence if the former president wins a second term, in the midst of a deepening divide among his advisers over how aggressively to challenge the central banks authority.
Former Trump administration officials and other supporters of the presumptive GOP nominee have in recent months discussed a range of proposals, from incremental policy changes to a long-shot assertion that the president himself should play a role in setting interest rates. A small group of the presidents allieswhose work is so secretive that even some prominent former Trump economic aides werent aware of ithas produced a roughly 10-page document outlining a policy vision for the central bank, according to people familiar with the matter.
The group of Trump allies argues that he should be consulted on interest-rate decisions, and the draft document recommends subjecting Fed regulations to White House review and more forcefully using the Treasury Department as a check on the central bank. The group also contends that Trump, if he returns to the White House, would have the authority to oust Jerome Powell as Fed chair before his four-year term ends in 2026, the people familiar with the matter said, though Powell would likely remain on the Feds board of governors. It couldnt be determined whether Trump is aware of or signed off on the effort, but some people close to the discussions believe the work has received the blessing of the former president.
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Several people who have spoken with Trump about the Fed said he appears to want someone in charge of the institution who will, in effect, treat the president as an ex officio member of the central banks rate-setting committee. Under such an approach, the chair would regularly seek Trumps views on interest-rate policy and then negotiate with the committee to steer policy on the presidents behalf. Some of the former presidents advisers have discussed requiring that candidates for Fed chair privately agree to consult informally with Trump on the central banks decisions, the people familiar with the matter said. Others have made the case that Trump himself could sit on the Feds board of governors on an acting basis, an option that several people close to the former president described as far-fetched.
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