Trump’s Plans Stir Fears for Fed Independence, Inflation

Donald Trump’s assertion that as president he should have more say over how the Federal Reserve sets interest rates would, if carried out, reverse a longstanding custom by which the central bank enjoys political autonomy to fight inflation with often unpopular rate increases.

Asked at a Thursday press conference if he should have a say over how the Fed makes interest rate decisions, Trump said, “I feel that the president should have at least [a] say in there, yeah, I feel that strongly.” They were the former president’s most direct acknowledgment of his longstanding desire to chip away at the central bank’s independence.

Economists and scholars have long argued for central bank independence on the theory that politicians prefer lower interest rates, though that can lead to inflation.