Independence from central banks is an essential prerequisite for your struggle for money value stability. Most economists agree on this. The debate is not decided, at least not in the USA. The independence of the American Federal Reserve is up there because President Donald Trump prepares the ground to get it under his control. A case in front of the Supreme Court may even open up the opportunity to do so. There is already unrest on the financial markets. Dollar, stocks and US state bonds had significantly gave in on Monday after the president of the president against the central bank Jerome Powell. In his latest contribution on his platform Truth Social, Trump not only attacked the head of the Federal Reserve as a big loser (“Major Loser”) and “Lord too late” (Mr. too late). But he assumed that he is party -political motifs. However, Trump’s assumption that he has reduced the key interest rates for party political reasons to help Joe Biden and Kamala Harris for election. Obviously, Trump referred to the interest rate in September 2024, when the Fed had reduced the interest by half a percentage point after the unemployment rate had increased from 3.7 percent to 4.2 percent within a month. What does Trump want to pursue several goals from the Federal Reserve. He wants the central bank to support its high -risk economic policy with a loose monetary policy. His latest trouble sparked the central banker’s testimony that tariffs most likely lead to an increase in inflation at least temporarily. Trump’s tariffs were significantly higher than expected, Powell said in a speech in Chicago last week. “This should also apply to the economic effects, which will include higher inflation and more slow growth,” said the head of the Federal Reserve. In doing so, he signaled that the FED does not plan any key interest rates at first, but it is more important for Trump that he is probably not tolerated that he does not tolerate his presidential power. Trump finds an independent authority that opposes the wishes of the White House with its monetary policy. This feeling is not unusual for political rulers. Former presidents such as Richard Nixon, Lyndon B. Johnson or Ronald Reagan had also tried to put the Federal Reserve under pressure, but had left less doubt about the independence of the Federal Reserve. In front of journalists in the White House, he also said: “I am not satisfied with him. I also told him that, and if I want him to go, he will go very quickly,” he added to me. Trump’s business advisor Kevin Hassett had confirmed on Friday that Trump continued to check Powell’s legal status and thus the opportunity to fire him. The essence is about how difficult a 90 -year -old decision of the Supreme Courts still weighs today. At that time, Franklin Delano Roosevelt tried to fire the head of the Federal Trade Commission, William E. Humphrey, which was confirmed by the Senate until 1938, for political reasons after he had asked him in vain to resign. The court rejected the President’s request at the reason that the commissioner could only be released from the president political disagreements. The Commission had created the congress and gave its mostly quasi-judicial and quasi-legislative tasks. In the classic sense, the commission did not touch the executive power of the President, according to the Trump government’s lawyers again argue that the president has the authority to dismiss head of similarly structured authorities, including the National Labor Relations Board and the Merit Systems Protection Board. They asked the court to lift the 90 -year -old precedent. Two members of these institutions fired by Trump had complained against their dismissal. As the judges decide, it is unclear. However, the conservative majority tends to grant the President great executive power. However, you could also refrain from making a new fundamental decision or making a judgment that the Federal Reserve deliberately isolates and thus even underpinned its independent status. However, Trump is to be checked over the Fed, then this could be fueled because investors would no longer believe that monetary policy decisions served to fight inflation.
