Secretive Trump Allies Plan To Curtail Federal Reserve's Independence: Report

Supporters of Donald Trump are said to be formulating plans that could potentially disrupt the independence of the Federal Reserve, if the former president were to be re-elected.

What Happened: Trump’s allies have been considering a variety of proposals in recent months. These range from incremental policy changes to a controversial claim that the president should have a say in setting interest rates, reported The Wall Street Journal.

A secretive group of Trump’s allies has prepared a 10-page document outlining a policy vision for the Federal Reserve, according to sources. The group proposes that Trump should be involved in interest-rate decisions and suggests subjecting Fed regulations to White House review. The document also advocates for a more proactive use of the Treasury Department to oversee the central bank.

The group also asserts that if Trump were to return to the White House, he would have the power to dismiss Jerome Powell as Fed chair before his term concludes in 2026. However, it is still uncertain whether Trump is aware of or has endorsed this initiative.

Senior advisers to Trump, Susie Wiles and Chris LaCivita, have warned that unless a message is directly from Trump or an authorized member of his campaign team, no aspect of future presidential staffing or policy announcements should be considered official, according to the report.

Benzinga has reached out to the Trump campaign for comment, the story will be updated as and when a response is received.

The prospect of Trump influencing interest rates was described as a “horrifying thought” by one former Trump administration official, according to the report.

Trump, known for his preference for low interest rates, has not yet decided how he would approach the Fed in a second term. He has had informal discussions with advisers about potential candidates to lead the central bank and has asked associates if they would be interested in the role.

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Why It Matters: Trump has previously expressed his dissatisfaction with Powell’s leadership of the Federal Reserve. In February 2024, he suggested that Powell’s decisions, especially regarding interest rate policies, might be politically motivated, favoring the Democratic Party.

In a meeting at his Mar-a-Lago club in Florida in March 2024, Trump was presented with a list of potential candidates to replace Powell, indicating his interest in a change of leadership at the Fed.

This is not the first time Trump has criticized Powell. Back in August 2019, he compared Powell to China’s President Xi Jinping, questioning who was a bigger enemy of the U.S.

Photo via Shutterstock

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