Trump’s push to overhaul Fed casts long shadow over policy meeting

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Trumps push to overhaul Fed casts long shadow over policy.jpeg

By Howard Schneider

WASHINGTON (Reuters)-Federal Reserve officials are preparing to gather on Tuesday to attend a two-day meeting amid increasing concerns about the independence of the central bank and the uncertainty about the formation of the policy Development Committee, as president Donald Trump pushes forward with a rapid effort to reform the American economy.

On Monday, the Federal Court of Appeal is expected to rule on whether the Federal Reserve Governor Lisa Cook can continue its function while litigating Trump’s attempt to shoot it, the ruling that can increase the position of the federal reserve as an institution is largely free of the impact of the executive branch in the monetary policy position at the present time.

However, the court is expected to judge an immediate appeal of the United States Supreme Court, adding an additional complexity to put Cook for this week’s policy meeting.

At the same time, the US Senate is expected to confirm on Monday, Stephen Miran, Speaker of the Economic Advisors at the White House, to an open seat in the seven seven members of the Governor, most likely put the right -wing in Trump at the meeting quickly and participating in this week’s meeting as sympathy with the administration of price contacts.

On Monday, Trump repeated this invitation, saying in a post on social media, referring to the Federal Reserve Chairman Jerome Powell that “he must reduce interest rates, now, and more than it was in mind. Housing will rise !!!”

The Federal Reserve was warned against lowering prices due to inflation concerns, but it is expected at the end of its meeting on Wednesday to reduce the record interest rate by a quarter of a percentage to a range of 4.00 % -4.25 %, as officials increase more than a sharp decrease in job growth and unemployment.

More discounts may be tracked in October and December, but at a slower pace than Trump, with the president’s call to obtain a 1 % policy of the Federal Reserve Policy that economists see extensively as a step out of a step with what will be required to keep inflation stable, in the absence of stagnation.

However, the decision of the Federal Reserve Policy may be the lowest axis of the meeting than the expected arrival of Miran and the implications of the upcoming cooking decision on the central bank as an institution and the direction of American monetary policy.

Trump will also be able to replace Powell when the Federal Reserve State term ends at the top of the central bank next May.

Miran’s approach may reveal Trump’s plans

In a poll conducted by the Department of Economics at Duke University recently, 24 of 25 out of 25 policy makers and former employees of the Federal Reserve that they now saw “high”, “dangerous” or “severe” from the risk of the independence of the Federal Reserve will lead to the monetary policy that is placed at a very level and destroy the higher inflation – and the result of textbooks was expected when the elected officials acquire monetary policy.

If Miran’s confirmation and his establishment is expected, he will be able to vote and oppose if he chooses the Federal Reserve Average decision this week, and to provide a set of economic expectations to include them in the “transportation plot” from expected interest rate procedures, a choice that can appear quickly if he agrees to invite Trump to obtain a policy of 1 %.

In fact, Miran’s approach to the job can offer an old look at the Trump administration plans for the Central Bank. In the absence of the majority of the Board of Directors to agree to any comprehensive changes, Miran, whose term continues in theory only until January 31, may have its greatest impact through the number of times he speaks publicly about monetary policy, federal reserves, the state of economics, and things that are believed to change – even to the culture of the Federal Reserve, which he criticized sharply in previous writings.

The fact that such issues, for some analysts, raises for some evidence of standing on the US Central Bank, whose previous isolation from the influence of the White House is the basic pillar of the confidence of global financial markets in dollars as a relatively free standard.

“The longer the federal reserve in the political intersection, the more likely the Federal Reserve isolating from party policy is eroding, which reduces the cornerstone of effective monetary policy,” said Christopher Hodge, the chief American economist in Natsisis.

“It will come on Wednesday and will go on Wednesday and will look like all other federal reserve meetings … I don’t think we will see fireworks,” he said, adding that future policy gatherings can show increasing departments and “that will be more than that than the dynamic FOMC (Federal Open Market Committee) in the upcoming meetings.”

The ruling on cooking is essential for discussion as well.

The declaration legislation at the Federal Reserve aims to preserve the Federal Reserve Governor is free of political influence in interest rates, an idea that is inherent in decades of central banking practice and case studies that turned out that when elected officials determine interest rates bad results – especially excessive inflation – usually follows.

Trump says that Cook should be removed from the Federal Reserve due to allegations that she had made a false statement on the mortgage request for the house before joining the Board of Directors. Cook denies any violations and has not been charged with any crime.

The Federal Reserve said earlier that it would follow any court decision regarding the status of Cook.

(Participated in the reports of Howard Schneider; edited by Dan Burns and Paul Simao)

2025-09-15 15:59:00

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