Washington, DC - August 12,
Republican U.S. vice presidential contender JD Vance stated his agreement with Donald Trump's demand that presidents should be involved in the decision-making process of the Federal Reserve Board, particularly with interest rate changes, describing them as "political" matters. CNN's "State of the Union" program featured Vance's comments following Trump's Aug. 8 statement to reporters, in which he said: "I feel the president should have at least (a) say in there."
Vance stated that Trump's stance is that the US political leadership should have greater influence over the country's monetary policy. Though the president has the power to appoint Federal Reserve Board members, previous administrations have mainly argued that interfering with the Fed's monetary policy would introduce temporary political pressures that could have a negative impact on the US economy in the long run.
Nonetheless, previous presidents have nonetheless found time to complain about the Federal Reserve's policies. I concur with Trump. At its core, that ought to be a matter for political consideration. Vance stated that, regardless of opinion, the elected leaders of the United States should be involved in deliberations about the most critical issues facing the nation.
To abandon the long-held belief that the Federal Reserve should be an autonomous body responsible for formulating monetary policy would constitute "a huge change," according to Vance. At his press conference in Florida last week, Trump boasted, "I think that in my case, I made a lot of money, I was very successful, and I think I have a better instinct than in many cases, people that would be on the Federal Reserve or the chairman." In his remarks, Trump omitted the fact that on multiple occasions throughout his financial career, his companies had gone bankrupt or failed to pay their interest.
The Democratic presidential candidate for California, Kamala Harris, publicly disagreed with Trump's stance on the Federal Reserve on August 10. Telling reporters in Phoenix, Arizona, that "the Fed is an independent entity and as president I would never interfere in the decisions that the Fed makes," Harris made his statement.
In March 2022, with the US economy recovering from the economic shocks caused by the COVID-19 epidemic, the Federal Reserve started increasing interest rates to control inflation. Any type of loan, from a mortgage to a credit card, can be affected by the interest rates set by the central bank.
Since inflation has been falling, Wall Street investors are waiting for the Federal Reserve to alter its course next month.
Following a peak of 7.1% in June 2022, the preferred inflation measure put inflation at 2.5% in June of this year, bringing it closer to the Fed's objective of 2%. While certain inflation indicators have been trending downward, others have been running higher.
Trump and Vance's comments follow the 2025 Presidential Transition Project, a contentious conservative program that calls for extensive government shakeup in the event that Trump defeats Harris in the presidential election on November 5.
In addition to other suggestions for the Federal Reserve, it suggested the following: establish a commission to investigate potential alternatives to the current system, the role of the Federal Reserve in the economy, and the current state of financial regulation in the country.
To counter the Democrats' escalating criticism of "Project 2025," Trump has sought to separate himself from the initiative.
