Trump Wants to Fire Federal Reserve Chairman Jerome Powell...

[hog88]

So all you MAGA nutballs excited about Trump trying to politicize the Federal Reserve Board?


President Donald Trump said Tuesday he will soon have a “majority” of his own nominees on the Federal Reserve board of governors who will back his desire to slash interest rates.

Trump’s comment at a Cabinet meeting came hours after he took the unprecedented step of moving to fire central bank Governor Lisa Cook, an appointee of former President Joe Biden, from the board.

Trump has already appointed two of the Fed board’s seven governors, and he is poised to appoint another to replace Adriana Kugler, who announced earlier this summer that she would step down.

“We’ll have a majority very shortly,” Trump said Tuesday afternoon. “So that’ll be great.”

“Once we have a majority, housing is going to swing, and it’s going to be great,” he said. “People are paying too high an interest rate. That’s the only problem with us. We have to get the rates down a little bit.”

# # #

The Federal Reserve's independence stems from its design to shield monetary policy from short-term political pressures, ensuring decisions prioritize long-term economic stability over electoral or partisan interests. Established by the Federal Reserve Act of 1913, the Fed operates as a quasi-public entity, with features like self-funding through interest on government securities and fees, rather than congressional appropriations, which insulates it from budgetary leverage. Its Board of Governors, appointed by the President and confirmed by the Senate, serves staggered 14-year terms, deliberately misaligned with presidential cycles to limit political influence. The Fed's monetary policy decisions, made by the Federal Open Market Committee (FOMC), don’t require approval from the executive or legislative branches, though it remains accountable to Congress through semi-annual reports and oversight.

This setup addresses historical issues, like the financial panics before 1913, where the absence of a central bank led to instability, requiring private bailouts (e.g., J.P. Morgan in 1895). Independence allows the Fed to focus on its dual mandate—maximum employment and stable prices—without succumbing to pressures for policies that might boost short-term growth but risk long-term harm, like inflation from excessive money printing. For example, in the 1970s, political pressure on Fed Chair Arthur Burns to keep rates low contributed to stagflation, while Paul Volcker’s independent rate hikes in the 1980s curbed inflation but caused a recession, showing the need for tough, apolitical decisions. Studies, like those from 1980-2000 across 19 countries, show independent central banks correlate with lower inflation, as they resist populist demands for loose policy.

Critics argue this independence reduces democratic accountability, potentially allowing unelected officials to wield outsized economic power, as seen in debates over the Fed’s handling of crises like Silicon Valley Bank’s collapse. Others contend coordination with government could align monetary and fiscal policy better. Still, the Fed’s structure—combining public oversight with operational autonomy—aims to balance accountability with the ability to make data-driven decisions for long-term economic health.[](https://www.investopedia.com/articles/investing/041515/why-federal-reserve-independent.asp)[](https://en.wikipedia.org/wiki/Federal_Reserve)[](https://www.nbcnews.com/business/economy/federal-reserve-historically-independent-white-house-rcna226617)

The Federal reserve board has been political for decades.

End the Fed!

 

[SpaceCoastVol]

So all you MAGA nutballs excited about Trump trying to politicize the Federal Reserve Board?


President Donald Trump said Tuesday he will soon have a “majority” of his own nominees on the Federal Reserve board of governors who will back his desire to slash interest rates.

Trump’s comment at a Cabinet meeting came hours after he took the unprecedented step of moving to fire central bank Governor Lisa Cook, an appointee of former President Joe Biden, from the board.

Trump has already appointed two of the Fed board’s seven governors, and he is poised to appoint another to replace Adriana Kugler, who announced earlier this summer that she would step down.

“We’ll have a majority very shortly,” Trump said Tuesday afternoon. “So that’ll be great.”

“Once we have a majority, housing is going to swing, and it’s going to be great,” he said. “People are paying too high an interest rate. That’s the only problem with us. We have to get the rates down a little bit.”

# # #

The Federal Reserve's independence stems from its design to shield monetary policy from short-term political pressures, ensuring decisions prioritize long-term economic stability over electoral or partisan interests. Established by the Federal Reserve Act of 1913, the Fed operates as a quasi-public entity, with features like self-funding through interest on government securities and fees, rather than congressional appropriations, which insulates it from budgetary leverage. Its Board of Governors, appointed by the President and confirmed by the Senate, serves staggered 14-year terms, deliberately misaligned with presidential cycles to limit political influence. The Fed's monetary policy decisions, made by the Federal Open Market Committee (FOMC), don’t require approval from the executive or legislative branches, though it remains accountable to Congress through semi-annual reports and oversight.

This setup addresses historical issues, like the financial panics before 1913, where the absence of a central bank led to instability, requiring private bailouts (e.g., J.P. Morgan in 1895). Independence allows the Fed to focus on its dual mandate—maximum employment and stable prices—without succumbing to pressures for policies that might boost short-term growth but risk long-term harm, like inflation from excessive money printing. For example, in the 1970s, political pressure on Fed Chair Arthur Burns to keep rates low contributed to stagflation, while Paul Volcker’s independent rate hikes in the 1980s curbed inflation but caused a recession, showing the need for tough, apolitical decisions. Studies, like those from 1980-2000 across 19 countries, show independent central banks correlate with lower inflation, as they resist populist demands for loose policy.

Critics argue this independence reduces democratic accountability, potentially allowing unelected officials to wield outsized economic power, as seen in debates over the Fed’s handling of crises like Silicon Valley Bank’s collapse. Others contend coordination with government could align monetary and fiscal policy better. Still, the Fed’s structure—combining public oversight with operational autonomy—aims to balance accountability with the ability to make data-driven decisions for long-term economic health.[](https://www.investopedia.com/articles/investing/041515/why-federal-reserve-independent.asp)[](https://en.wikipedia.org/wiki/Federal_Reserve)[](https://www.nbcnews.com/business/economy/federal-reserve-historically-independent-white-house-rcna226617)

Oh look, another Grok cut and paste.

Anyone else not read it?

 

[jmacvols1]

 

[n_huffhines]

The Fed fixed something when Carter appointed Volcker to raise interest rates and defeat the stagflation that Nixon and Ford afflicted us with.

 

[05_never_again]

The Fed fixed something when Carter appointed Volcker to raise interest rates and defeat the stagflation that Nixon and Ford afflicted us with.

The tweet overstates the argument but to be fair, that might be the only time in their history where there was some kind of issue and what the Fed did absolutely solved the problem. At best, their role in various other problems or crises is unclear/questionable (dot-com bubble) or they played a role in creating it. Ben Bernanke himself admitted the Fed made the Great Depression worse.

What grinds my gears the most about the anti-Fed crowd is the false picture they paint of everything being sunshine and roses before the Fed existed. The Fed was created directly to address about once-every-ten-years financial panics that caused huge recessions or depressions in the late 1800s (1873, 1884, 1893, 1896, 1901, 1907). On that basis, the Fed has succeeded in that goal as well.

 

[hog88]

The tweet overstates the argument but to be fair, that might be the only time in their history where there was some kind of issue and what the Fed did absolutely solved the problem. At best, their role in various other problems or crises is unclear/questionable (dot-com bubble) or they played a role in creating it. Ben Bernanke himself admitted the Fed made the Great Depression worse.

What grinds my gears the most about the anti-Fed crowd is the false picture they paint of everything being sunshine and roses before the Fed existed. The Fed was created directly to address about once-every-ten-years financial panics that caused huge recessions or depressions in the late 1800s (1873, 1884, 1893, 1896, 1901, 1907). On that basis, the Fed has succeeded in that goal as well.

Yes we had more frequent recessions and mild depressions prior to the Fed, many of the recessions were regional and all were short lived. The Great Depression was after the creation of the fed and was the longest and worst in our history. Not to mention that since the creation of the Fed we haven't changed the pattern of recessions much 1937, 1945, 1948, 1953, 1957, 1960, 1969, 1973, 1908-82, 1990, 2001 and 2007. If anything recessions have become more frequent since the creation of the Federal Reserve.

 

[n_huffhines]

The tweet overstates the argument but to be fair, that might be the only time in their history where there was some kind of issue and what the Fed did absolutely solved the problem. At best, their role in various other problems or crises is unclear/questionable (dot-com bubble) or they played a role in creating it. Ben Bernanke himself admitted the Fed made the Great Depression worse.

What grinds my gears the most about the anti-Fed crowd is the false picture they paint of everything being sunshine and roses before the Fed existed. The Fed was created directly to address about once-every-ten-years financial panics that caused huge recessions or depressions in the late 1800s (1873, 1884, 1893, 1896, 1901, 1907). On that basis, the Fed has succeeded in that goal as well.

I'm not a fan of the Fed, but it's disingenuous to say they never fixed anything. That's not true, and it's not even the Fed's job to fix problems, really. Its job is to prevent problems, and it's hard to prove it does a good/bad job at that. I've tried, LOL.

 

[05_never_again]

Yes we had more frequent recessions and mild depressions prior to the Fed, many of the recessions were regional and all were short lived. The Great Depression was after the creation of the fed and was the longest and worst in our history. Not to mention that since the creation of the Fed we haven't changed the pattern of recessions much 1937, 1945, 1948, 1953, 1957, 1960, 1969, 1973, 1908-82, 1990, 2001 and 2007. If anything recessions have become more frequent since the creation of the Federal Reserve.

Recessions have not gotten more frequent since the Fed. It was never really a stated goal to make recessions less frequent anyway, and you can make a good argument that it shouldn't even be their goal (I've never been convinced that they should have a dual mandate). It was an explicit goal to make deflationary financial panics less frequent, and financial panics have absolutely gotten less frequent since the Fed. There have been 2 occur on their watch in over 100 years, and they were quite frequent in the preceding decades.

The panics I listed above were the cause of or occurred during worldwide recessions or even depressions, and not all were short-lived. In particular, the Long Depression that occurred after the Panic of 1873 was not as bad as the Great Depression but probably worse than the GFC. Some people view the British economy in particular as being in a continuous depression (or, at the very least, a damaging continuous period of deflation) from 1873 until the mid-1890s.

 

[05_never_again]

I'm not a fan of the Fed, but it's disingenuous to say they never fixed anything. That's not true, and it's not even the Fed's job to fix problems, really. Its job is to prevent problems, and it's hard to prove it does a good/bad job at that. I've tried, LOL.

They're probably even worse at preventing problems than fixing problems. Honestly, I don't even know if the reason financial panics have been less frequent post-Fed is directly because of them. I think they probably have something to do with it given their role as lender of last resort, but the 20th and 21st Century economy is also so different than the 19th Century economy, which was very agrarian and more subject to boom-bust cycles.

 

[hog88]

Recessions have not gotten more frequent since the Fed. It was never really a stated goal to make recessions less frequent anyway, and you can make a good argument that it shouldn't even be their goal (I've never been convinced that they should have a dual mandate). It was an explicit goal to make deflationary financial panics less frequent, and financial panics have absolutely gotten less frequent since the Fed. There have been 2 occur on their watch in over 100 years, and they were quite frequent in the preceding decades.

The panics I listed above were the cause of or occurred during worldwide recessions or even depressions, and not all were short-lived. In particular, the Long Depression that occurred after the Panic of 1873 was not as bad as the Great Depression but probably worse than the GFC. Some people view the British economy in particular as being in a continuous depression (or, at the very least, a damaging continuous period of deflation) from 1873 until the mid-1890s.

Recessions and deflationary financial panics go hand in hand.