Jerome Powell, Federal Reserve chair, faces criticism and threats from Donald Trump, who aims to fire him, diverging from tradition regarding central bank independence. Powell, appointed by Trump in 2018 and reappointed by Biden, oversees monetary policy, influencing interest rates based on inflation and labor market conditions. As inflation soared to 9% in mid-2022, the Fed raised interest rates significantly to control it. Recently, rates have decreased, reflecting market sensitivity to Fed actions. Trump's actions prompt discussions on the relationship between presidential authority and monetary policy governance.
Trump's recent threats against the Fed chair reflect a significant departure from historical norms of presidential respect for the central bank's independence.
The Fed's dual mandate of managing inflation and the labor market has led to tumultuous interest rate decisions that impact the broader economy and financial markets.
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