Appointee under Biden's administration exerts influence on Federal Reserve officials - Federal Influence by Trump: Pressuring the Central Bank
Federal Reserve Maintains Interest Rates Amidst Political Pressure
In the midst of political tension, the Federal Reserve has maintained its interest rates, bucking the demands of former President Donald Trump. Despite Trump's public pressure for immediate rate cuts and his criticism of Federal Reserve Chair Jerome Powell, the Fed held firm in its decision.
At a recent meeting, the Federal Open Market Committee (FOMC) announced that it would keep interest rates in the range of 4.25 to 4.5 percent. This decision was made collectively, not as a unilateral choice by Chairman Powell. The meeting took place at the Federal Reserve System.
Two board members appointed by Trump voted for an interest rate cut, while Kugler voted with the majority to maintain the prime rate. However, the demand for a rate cut was not met, as the Fed has been keen to avoid political interference in its decision-making process.
Powell, who was not appointed by Trump but by President Joe Biden, has been a target of Trump's criticism for months. Trump has called Powell a "fool," "weak," and a "loser," and has pressured the Fed to lower rates. In 2023, Trump publicly berated Powell on his social platform, Truth Social, calling him a "stubborn moron" and urging the Fed's Board of Governors to take control away from him if he resisted lowering rates.
However, Powell has stood his ground, warning Trump against using interest rates to influence elections. He has emphasized the importance of the Fed's independence and its role in maintaining the stability of the economy.
Despite the pressure from Trump, the Fed has remained steadfast in its decision-making process. This was evident in the FOMC's decision on July 30, 2023, when it decided to keep the interest rate in the range of 4.25 to 4.5 percent for the fifth consecutive time.
Meanwhile, Lael Brainard, a Biden-appointed member of the Federal Reserve Board, has announced her early departure. Her term was set to end in January, but she will leave the Fed before that. Brainard did not cite any reason for her early departure in the Fed statement. After leaving the Fed, she plans to return to Georgetown University in Washington as a professor.
Trump has questioned the independence of the central bank in relation to the interest rate decision and has noted "strong divisions" within the Fed that are "only getting stronger." However, the Fed has continued to prioritize its mandate of maintaining price stability and maximum employment, regardless of political pressure.
[1] Truth Social Post by Donald Trump, July 2023
[2] Federal Reserve Press Release, July 30, 2023
- The demand for an interest rate cut by former US President Donald Trump, who repeatedly criticized Federal Reserve Chair Jerome Powell and pressed for lower rates, was not met.
- Despite questions about the independence of the central bank, the Fed continues to prioritize its mandate of maintaining price stability and maximum employment, withstanding political pressure.
- The Federal Open Market Committee's (FOMC) decision to maintain interest rates in the face of political pressure and internal divisions within the Fed was made collectively, not solely by Chairman Jerome Powell, as some suggested.
