Why Trump and the Federal Reserve could clash in the coming years
President-elect Donald Trump campaigned on the promise that his policies would reduce high borrowing costs and lighten the financial burden on American households
WASHINGTON (AP) — President-elect Donald Trump campaigned on the promise that his policies would reduce high borrowing costs and lighten the financial burden on American households.
But what if, as many economists expect, interest rates remain elevated, well above their pre-pandemic lows?
Trump could point a finger at the Federal Reserve, and in particular at its chair, Jerome Powell, whom Trump himself nominated to lead the Fed. During his first term, Trump repeatedly and publicly ridiculed the Powell Fed, complaining that it kept interest rates too high. Trump's attacks on the Fed raised widespread concern about political interference in the Fed's policymaking.
On Wednesday, Powell emphasized the importance of the Fed's independence: “That gives us the ability to make decisions for the benefit of all Americans at all times, not for any particular political party or political outcome.”
