The Independent Federal Reserve Is on Death Row
Disempowering the Fed just as concerns mount about tariff-driven inflation and surging public debt threatens a perfect economic storm.
The clock is ticking on Fed independence.
Photographer: Al Drago/Bloomberg
President Donald Trump and his Republican-controlled Congress have already repudiated two of the three commandments that guided US economic policy for decades: Promote international trade; maintain at least some semblance of fiscal control. The third — de—legate monetary policy to an operationally independent central bank — is also now marked for deletion.
Each departure from the pre-Trump consensus on trade, budgets and monetary policy would be damaging in its own right, but the combination of all three involves a quite different order of risk. Disempowering the Federal Reserve just as concerns are mounting about tariff-driven inflation and surging public debt threatens, sooner or later, a perfect economic storm.