Former President Trump has walked back his claim that he should have a say in the Federal Reserve’s interest rate decisions, but defended his right to comment on issues the central bank considers.
The Republican presidential candidate suggested earlier this month that because he’s “made a lot of money” he “should at least have a say” in interest rates and other monetary policy.
But Trump appears to have softened his stance. During the interview Monday with Bloomberg.
“I think it’s fine for the president to talk, but that doesn’t mean the president has to listen,” Trump said.
“Obviously the president can talk about interest rates because I think I have very good instincts,” he said. “That doesn’t mean I’m in charge, but it does mean I should have the right to talk about interest rates just like anybody else.”
In April, The Wall Street Journal reported. Allies of President Donald Trump are reportedly developing plans to weaken the central bank’s independence if he wins the presidential election in November, alarming experts and investors.
The Trump campaign said the plan should not be considered an official position.
But the former president broke with tradition during his first term by vocally calling for the central bank to cut interest rates, publicly clashing with Fed Chairman Jerome Powell, whom he appointed in 2017.
The former president also told Bloomberg that he “engaged in verbal negotiations” with Powell about interest rates while in office, which “may or may not have been effective.”
While Powell has repeatedly said the central bank doesn’t make decisions based on politics, interest rates set by a committee of Fed officials have become an increasingly partisan issue as the November election approaches.
The central bank is expected to finally cut borrowing costs when its Federal Open Market Committee meets next month after keeping interest rates unchanged at a 23-year high of 5.25% to 5.5% for more than a year.
Democrats, including Sen. Elizabeth Warren (D-Mass.), have been urging Powell to cut rates because borrowing costs are straining Americans, which is widely expected to stimulate economic activity.
But earlier this year, President Trump accused the lifelong Republican chairman of being “political” and suggested he would cut interest rates as a gift to Democrats in the election.
“It seems to me that he’s trying to lower interest rates maybe just to get elected, but I don’t know,” Trump told Fox Business Network’s Maria Bartiromo in February.
“I think he’ll probably do something to help the Democrats,” he said.
After President Trump suggested earlier this month that he should have a say in Fed policy, Jared Bernstein, chairman of the White House Council of Economic Advisers, stressed the “importance of central bank independence,” in a sharp contrast to his predecessor.
“History has shown that ignoring this lesson or reversing the hard-won progress of the past half century will have lasting, damaging inflationary consequences,” Bernstein said.
