Trump’s Plan for Unprecedented Control over Federal Reserve: Become ‘Acting’ Board Member, Remove Powell, Align Policy with Administration Goals

According to an article in The Wall Street Journal, Donald Trump’s former advisors are devising a plan granting him extraordinary power over the Federal Reserve, potentially allowing him to become an “acting” member of its board. This proposal is part of a 10-page document that suggests if he wins another term, President Trump would be involved in making decisions on interest rates and exert additional influence by utilizing the Treasury Department as a means for overseeing the Fed’s bond purchases. The draft also proposes removing current Federal Reserve Chair Jerome Powell from office and compelling alignment of policy with administration objectives – an action that may lead to clashes since President Trump frequently condemned both Powell and other central bank members in past for elevating interest rates when they served as policymakers, seriously mulling whether or not he should dismiss him. The campaign officials informed the Journal that these proposals shouldn’t be interpreted literally but did not offer any clarification on how realistic this draft was from an operational perspective because it remains unclear what authority a president could have to take such drastic steps regarding the Fed, which traditionally insulates itself against external political interference while conducting its business. CNBC has yet to receive feedback about these proposals from the Federal Reserve at press time.