Allies of Donald Trump are quietly preparing proposals that would undermine the independence of the Federal Reserve if the former US president wins a second term, The Wall Street Journal reported, citing its sources.
A small group of former Trump administration officials and other Trump supporters have been discussing a range of proposals in recent months, from gradual changes in central bank policy to giving the president himself a role in setting interest rates, the WSJ said. The small unit of allies — whose work is so secret that even some prominent former Trump economic aides were unaware of it — has drawn up a roughly 10-page document outlining a policy vision for the central bank.
The classified draft document states that Trump should be kept informed of interest rate decisions, and that Fed policy should be aligned with the White House’s goals and that the Treasury Department be used as additional checks and balances for oversight of the US central bank’s bond-buying activities.
The group also argued that Trump, if returned to the White House, would have the power to oust Jerome Powell as Fed chairman before his four-year term ends in 2026, although Powell would likely remain on the Fed’s board.
While in office, Trump sharply criticized Powell and his fellow central bankers for raising interest rates and reportedly considered removing him, CNBC noted.
Although WSJ’s sources said the document had Trump’s blessing, it could not be determined whether the former president was aware of the prepared document.
“Let’s be honest: Unless the message comes directly from President Trump or an authorized member of his campaign team, no aspect of political communications should be considered official,” senior Trump advisers Susie Wiles and Chris LaCivita said in a statement.
It’s unclear what authority the president would have to take such bold steps against the Federal Reserve, which has traditionally sought to shield its operations from outside political pressure.
