Americast Why is Trump targeting America's most powerful bank?
Sep 2, 2025
Jillian Tett, an economics columnist for the Financial Times and head of King's College at Cambridge, dives into Donald Trump’s unusual targeting of the Federal Reserve. She explores the consequences of a president seeking to control this independent institution, particularly Trump’s tensions with Chairman Jerome Powell. The conversation reveals the pivotal role the Fed plays in regulating the economy, the implications of political pressures on monetary policy, and what his ambitions mean for economic stability ahead of the 2024 election.
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Fed Controls The Economy's Main Lever
- The Federal Reserve is the US central bank and a central lever for managing inflation and the economy through interest rates.
- Its decisions affect mortgages, car loans and business borrowing and thus everyday economic activity.
Designed To Be Politically Insulated
- The Fed is quasi-independent: presidents appoint governors but cannot micromanage daily policy.
- Governors serve 14-year staggered terms to reduce short-term political influence.
Conflict Over Cutting Rates
- Trump wants lower interest rates to boost consumer spending and growth before the election.
- The Fed resists because persistent inflation and tariffs risk reigniting price rises.
