The Federal Reserve, created by Congress through the Federal Reserve Act in 1913, is facing pressure from the White House regarding interest rates. President Trump, while not pursuing a dismissal of Fed Chairman Powell, demands lower interest rates. Recently, Governor Adriana Kugler announced her early resignation, allowing Trump to appoint a new chair. Concerns arise over the Fed's independence as Congress retains the power to alter its authority. Experts warn that economic downturns could lead to shifts in power dynamics between the White House and the Fed.
"That is a threat. Don't forget, our Federal Reserve is not at all a part of our Constitution. It's a creature of the U.S. Congress, created by the Federal Reserve Act 1913. All its powers devolve from Congress."
"If the economy stumbles, then Trump can point to Powell as the 'perfect scapegoat' and ask Congress to give him more power over the Fed."
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