NewsletterFormer Federal Reserve Adviser Calls Out Trump Allies’ Fed Remodeling Plans
Highlights
- Former Federal Reserve Board special adviser Andy Levin has called out Donald Trump and his advisers for their alleged plans of remodeling the Federal Reserve.
- The mood among investors has been affected recently by growing fears about the Fed's aggressive approach and its plans to raise interest rates.
- Furthermore, the Fed's bond-purchasing operations may come under the supervision of the Treasury Department, adding another level of executive control.
Former Federal Reserve Board special adviser Andy Levin has called out Donald Trump and his advisers for their alleged plans of remodeling the Federal Reserve. Notably, the plan—which is contained in a classified 10-page document—proposes Trump having unprecedented control over the actions of the central bank, possibly even to the point of firing Fed Chair Jerome Powell.
Andy Levin Clarifies If Federal Reserve Remodeling Is Possible?
Former Federal Reserve Board special adviser Andy Levin in an interview with Yahoo Finance said that at present public dissatisfaction, and the next government that will be there in the white house will have to tackle it.
Though doubtful if this proposal by Donald Trump will go through, Levin says that the Fed is a complex body altogether. While there can be some intervention from other institutions to help the Federal Reserve work better, political interference is not appropriate and might not take place.
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Donald Trump’s Federal Reserve Revamp Plan
According to shocking allegations from CNBC, which cited The Wall Street Journal, former President Donald Trump and his advisors are thinking about drastically changing the Federal Reserve.
The mood among investors has been affected recently by growing fears about the Fed’s aggressive approach and its plans to raise interest rates. In addition, the recent PCE inflation data that was higher than expected has further undermined market investors’ confidence. Among all of this, the most recent revelation regarding Donald Trump’s proposal has garnered attention in the global financial market, not to mention the cryptocurrency industry.
In the meanwhile, the very clandestine strategy that has been suggested seeks to give Trump unmatched control over the Federal Reserve’s decision-making procedures. Key components of the idea, according to the most recent report, include potentially appointing Donald Trump as an “acting” member of the central bank board and consulting him on interest rate decisions.
Furthermore, the Fed’s bond-purchasing operations may come under the supervision of the Treasury Department, adding another level of executive control. Such actions would, of course, constitute a dramatic break from the Federal Reserve’s long-standing independence and give rise to worries about the politics of monetary policy.
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