The Federal Reserve met for the first under Donald Trump’s presidency. His criticisms of its work have raised fears about its independence.
CGTN’s Owen Fairclough reports.
Trump remains antagonistic to Fed as central bank convenes for meetingThe Federal Reserve met for the first under Donald Trump's presidency. His criticisms of its work have raised fears about its independence. CGTN’s Owen Fairclough reports.
The U.S. Federal Reserve guarantees every dollar that changes hands around the world. In theory, the Fed promotes financial stability for the public’s benefit, not just the president’s. But its independence has been challenged by Donald Trump.
As a Republican candidate Trump accused the Fed of helping Democrats by keeping U.S. interest rates near zero to cut unemployment and prop up a fragile recovery. But, the Fed chair didn’t take that lying down.
The exchange led to fears Trump would, in turn, try to pressure the Fed to do his bidding. So why does it matter?
“The choices made by central banks affect the price of goods, how much you pay in the supermarket. It affects how much you pay for gas. It affects how much a loan is to pay a mortgage on your house,” Sarah Binder a professor of Political Science at George Washington University said.
And potentially runaway inflation. This ruined Germany’s economy in the 1930s. Money was so worthless it was burned, because it was cheaper than wood or coal.
There are checks and balances in place to stop presidential overreach. The Fed reports to Congress rather than the President. But some experts see a broader trend.
The ultimate test of President Trump’s attitude towards the Federal Reserve may be in 2018 when he’ll either reappoint Janet Yellen, former President Obama’s choice or replace her.
Tara Sinclair discusses the latest news from the Federal Reserve
For more on the Federal Reserve’s decision not to change rates and what it could me for the Trump administrations criticisms, CGTN’s Paul Barber spoke with Tara Sinclair, Chief Economist for the jobsite Indeed.com.
David Nelson on the latest from the Fed
To have a detailed discussion on the latest news and changes at the Federal Reserve and their relationship with the Trump administration, CGTN’ Sean Callebs spoke to David Nelson, chief strategist at Belpointe.