Geopolitical Economy Report What does Trump really want from the Federal Reserve?
Sep 18, 2025
Michael Hudson, an economist and critic of financialization, joins Radhika Desai to unpack Donald Trump's relentless critiques of the Federal Reserve. They explore how the Fed's easy-money policies have led to rampant asset-price inflation and question the true independence of the central bank. The discussion also delves into Trump’s contradictory goals regarding monetary policy, the growing financial oligarchy, and the shift from democratic economics to financial sector dominance. Ultimately, they reflect on the future of democracy in the face of central bank influences.
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Independence Masked Regulatory Capture
- The Fed's independence became a cover for regulatory capture by finance rather than public economic management.
- Monetary policy displaced fiscal policy, prioritizing asset inflation over industrial investment.
Lower Rates Fuel Speculation, Not Industry
- Trump wants lower rates to boost assets and make speculation profitable, not to revive industry.
- Lower rates mainly empower speculators while the U.S. lacks export capacity due to deindustrialization.
Crisis Response Created A Ponzi Dynamic
- Post-2008 policy prevented debt write-downs and aimed to prop up asset prices for banks and speculators.
- That response turned the economy into a Ponzi-like system dependent on ever-lower rates and rising asset prices.