Attacking the Federal Reserve is self-defeating
Why the Trump administration’s no-holds-barred campaign for lower interest rates is likely to backfire
[WASHINGTON, DC] Elected political leaders often express frustration with monetary policymakers. If only the central bank would lower interest rates, they reckon, businesses and households could borrow more easily for long-term purposes, such as building factories and buying homes, boosting the economy and, typically, incumbents’ re-election chances.
If the central bank, concerned about inflation, keeps interest rates higher, some politicians try to pressure the officials into lowering interest rates by all possible means, from browbeating to changing the leadership.
This is the current situation in the US, where President Donald Trump is determined to subordinate the Federal Reserve to his will.
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