The WSJ is out with a new report from Nick Timiraos and two other reporters. It says that Trump’s “allies are quietly drafting proposals that would attempt to erode the Federal Reserve’s independence” if he wins the November election.
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 president’s allies—whose work is so secretive that even some prominent former Trump economic aides weren’t aware of it—has produced a roughly 10-page document outlining a policy vision for the central bank, according to people familiar with the matter.
The mechanics of the Federal Reserve would make it extremely difficult for Trump to take over the White House.
- Jerome H. Powell (Chair) – His second term as Chair started in 2022 and is set to last until January 31, 2026
- Philip N. Jefferson (Vice Chair) – His term as a Board member is set to end on January 31, 2036
- Michael S. Barr (Vice Chair for Supervision) – His term as a Board member will conclude on January 31, 2032
- Michelle W. Bowman – Her term is scheduled to end on January 31, 2034
- Lisa D. Cook – Her term is set to end on January 31, 2032
- Christopher J. Waller – His term will end on January 31, 2030
- Adriana Kugler – Her term is set to end January 31, 2026
Any replacements would need to be confirmed by the Senate.
Regional directors with rotating votes are also appointed by their regional board’s of directors.
There is an open question about whether Trump could try and oust Powell but even if he did, Powell would have the option to remain on the board of governors.
Traditionally, the chair has a strong say in the direction of policy but if he were directed by the president, I strongly suspect the other votes would ignore him or push back hard.
Overall, I think this is a nothing story for the Fed but is a strong indication of how a second Trump presidency would go in many other departments.