Why Trump Is Pressuring the Fed on Rates
U.S. corporations are loaded with risky debt, making them vulnerable to higher interest costs.
Interest rates?That way.
Photographer: Mark Wilson/Getty Images North AmericaModern macroeconomics places great value on the idea of an independent central bank. Sitting above and apart from the political fray, wise central bankers are supposed to use interest rates so as to steer the economy between the Scylla of inflation and the Charybdis of recession.
President Donald Trump has little use for modern macroeconomics. In private remarks to donors, and again in an interview, the president lamented that his appointee, Federal Reserve Chairman Jerome Powell, had been too quick to raise interest rates as the U.S. economy revs up. As central bankers get ready for the annual Economic Policy Symposium at Jackson Hole, Wyoming, the threat to their tradition of autonomy must weigh heavily on their minds.