The Fed Is Built to Resist Trump’s Meddling

President Donald Trump hasn’t made any secret of his thinking on monetary policy: He intends to replace Federal Reserve Chair Jerome Powell with someone who will cut interest rates once they take over next year, if not sooner. Fortunately, America’s central bank was built to prevent such a coup from the executive branch. That’s why financial markets have been taking Trump’s antics in stride, try as he might to undermine the Fed’s independent, technocratic tradition.

First, Trump would have to win approval for his nominee in the Senate. The Committee on Banking, Housing, and Urban Affairs will host hearings with Trump’s pick, and lawmakers will size up the candidate’s seriousness before they even consider a vote in the full Senate. Granted, I’ve been recently disheartened by the way that Republican fiscal hawks spinelessly caved to Trump’s irresponsible budget this month, but there’s a chance that even the president’s allies will draw the line at the integrity of our central bank. Consider, for instance, the failed nomination of Judy Shelton to the Federal Reserve Board in 2020 during Trump’s first presidency. Shelton, a gold-standard revivalist who was plainly unfit for the job, elicited an uproar among economists and former Fed staffers. Key Republican senators stepped up and refused to back her, a rebuke of the president at a time when his party had majority control in the legislative body.