Trump allies drafting plans to erode Fed’s independence, WSJ reports

By Thomson Reuters Apr 26, 2024 | 6:32 AM

(Reuters) -The allies of Republican presidential candidate Donald Trump are drafting proposals that would attempt to erode the Federal Reserve’s independence if he wins, the Wall Street Journal reported on Thursday, citing people familiar with the matter.

A small group of the former president’s allies has produced a nearly 10-page document outlining a policy vision for the central bank, according to the report.

The group argues that Trump should be consulted on rate decisions and would have the authority to remove Jerome Powell as Fed Chair before his term ends in 2026, the report added.

Trump had picked Powell in 2017 to lead the U.S. central bank but turned against him soon after. He said in February that he would not reappoint Powell and believed the Fed chief would lower interest rates to help President Joe Biden’s prospects for re-election.

The Journal said it could not determine if the former president was aware of or signed off on the effort, but some people close to the discussions believe the work has received his blessing.

The former president has had informal discussions with advisers about possible candidates to lead the Fed and has asked associates whether they would be interested in the job, the report said.

Trump’s campaign did not immediately respond to a Reuters request for comment.

(Reporting by Niket Nishant in Bengaluru; Editing by Anil D’Silva)