The Tension Between Political Influence and Federal Reserve Independence

The Federal Reserve has been under intense pressure from President Donald Trump as he pushes for more control over the historically independent agency. The Fed is tasked with keeping inflation and unemployment under control, and it’s supposed to be insulated from politics so it can do whatever is necessary for the economy. But Trump has been openly saying he wants interest rates to be lower. A lot lower.

And on Monday, Trump posted a bombshell. He said that he was removing Federal Reserve governor Lisa Cook, “for cause.” Lisa Cook has told NPR she intends to remain in office, and is now suing Trump. 

On today’s show: inside the Fed Board of Governors. How realistic is a plan to control monetary policy through loyalists on the Board? We hear from former Board governors to understand what the job is, and what we might be in for. 

Further listening on the Fed and Fed independence:

- A primer on the Federal Reserve's independence
- Happy Fed Independence Day
- The case for Fed independence in the Nixon tapes
- A Locked Door, A Secret Meeting And The Birth Of The Fed
- Trump's unprecedented attack on the Fed
- Turkey's runaway inflation problem 
- Should presidents have more of a say in interest rates?

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