(Reuters) – Republican President Donald Trump on Thursday gave the clearest indication yet of his interest in undermining the independence of the Federal Reserve if he were to regain the White House.
“I feel that the president should at least have (a) say there” about the Fed's decisions, the former president told reporters at his Mar-a-Lago residence in Florida.
His comments follow reports this spring that Trump's allies have drafted proposals that would try to undermine the Fed's independence if he wins. While Trump's campaign distanced itself from the Wall Street Journal's report at the time, his words on Thursday showed that he is completely in line with one of the main proposals: If he becomes president, Trump should be consulted on interest rate decisions, as well as the Fed. proposals for banking regulation should be subject to White House review.
Presidents complaining about the Fed – especially at times when it raises interest rates – is nothing new, but such direct involvement in Fed matters by Trump if he wins will make him the first president since Richard Nixon in the early 1970s to do so. directly to the Fed's policy making.
Trump's opinion contradicts that of Vice President Kamala Harris, his rival for the presidency. CNBC, citing a Harris aide, reported on Friday that the Democratic candidate believes the Fed should make decisions independently of the president.
APPOINTMENT OF THE PRESIDENT
The most obvious form of control is the appointment system. The Fed chief is appointed by the president, subject to Senate confirmation, and Trump could try to install a Fed chief who is willing to put loyalty to him over the Fed's long-term independence.
Trump has a long history of butting heads with current Fed Chairman Jerome Powell, whom he installed as central bank chief in 2018. It was a relationship that Trump revisited in his remarks on Thursday, saying “I fought him hard.”
Powell has been able to withstand Trump's verbal attacks and has spent a long time as chairman building relationships with top Republicans and Democrats in Congress that have strengthened his standing.
His second term as chairman — Powell was reappointed by President Joe Biden — does not expire until May 2026, and Trump told Bloomberg this summer that he would not try to fire Powell before his term is up — something Trump has repeatedly said he would do during his term. at the White House. That would leave a window of more than two years for Trump to take the reins on a new Fed chief of his choice, assuming such a choice wins Senate confirmation.
The next president will also have the opportunity to choose two Fed vice chairs – one for monetary policy and one for banking supervision.
THE FED PROGRAM
The Federal Reserve System, created by Congress in 1913, includes the Federal Reserve Board of Washington; 12 regional Federal Reserve banks nationwide; and the Federal Open Market Committee which sets interest rates.
The seven members of the Fed board include the chairman, two vice-chairmen and four other governors. All are presidential nominees subject to Senate confirmation.
Besides Powell, two of Trump's appointees remain on the board, and governors Michelle Bowman and Christopher Waller have carved out a tradition of liberalism at the Fed. Three other Trump candidates for a board seat seen by many as pushing that envelope — Stephen Moore, Judith Shelton and Herman Cain — withdrew or failed to get Senate confirmation.
Each regional Fed bank is headed by a president appointed by a subcommittee of each bank's board of directors.
The FOMC includes all seven board members, the president of the Federal Reserve Bank of New York, and four other regional bank presidents on a rotating basis.
BOARD NOW
Fed governors serve terms of 14 years or the remaining unexpired term of the incumbent. The term expires in two-year intervals, with the next in 2026, the seat held by Gov. Adriana Kugler, a Biden appointee.
The Fed chair and vice chair serve four-year terms that run concurrently with their presidency. Powell's term as chairman expires in May 2026, but his board seat continues until 2028. Although historically former Fed chairmen have not stayed on as governor if they are reappointed as Fed chair, there is no need for them to leave. If Powell had chosen to continue, it would have limited Trump's options for installing more board members who align with his wishes.
The following is a list of the current rulers, in order of the end of their term and the closest ones listed first.
Board Member Consolidated Board, Board Term He was the chairman/vice-chairman/deputy
As long as the term of the seat expires, he is re-elected for the term of the chairman
it ends
Adriana Kugler 9/13/2023 Jan 2026
Jerome Powell, 5/25/2012, Jan 2028 2/5/2018, May 2026
seat 6/16/2014 5/23/2022
Christopher Waller 12/18/2020 Jan 2030
Michael Barr, vice 7/19/2022 Jan 2032 7/19/2022 July 2026
chair for
supervision
Michelle Bowman 11/26/2018, Jan 2034
1/23/2020
Philip Jefferson, 5/23/2022 Jan 2036 9/13/2023 Sept 2027
vice chairman
Lisa Cook 5/23/2022, Jan 2038
9/8/2023
BANK PRESIDENTS NOW
The presidents of the Fed banks are elected by the six non-bank members of their boards of directors, and must be approved by the Fed Board. They can work until the mandatory retirement age of 65 or, if appointed after the age of 55, for 10 years or until they reach the age of 75.
The terms of all current bank presidents expire in February 2026, when they will be considered for five-year re-election by the Board of Governors. This process of repetition has historically not resulted in any change in leadership, but this is not the rule.
The following is a list of term limit dates for Fed regional bank presidents.
Bank President Pending expiration
PHILADELPHIA Patrick Harker June 2025
RICHMOND Thomas Barkin Jan 2028
NEW YORK John Williams June 2028
SAN FRANCISCO Mary Daly Oct 2028
ATLANTA Raphael Bostic June 2031
Boston Susan Collins July 2032
KANSAS CITY Jeffrey Schmid August 2033
ST LOUIS Alberto Musalem April 2034
CHICAGO Austan Goolsbee August 2034
MINNEAPOLIS Neel Kashkari July 2038
DALLAS Lorie Logan February 2038
CLEVELAND Beth Hammack* January 2037
*of course
because of taking
office August 21
