White House Council of Economic Advisers Chair Jared Bernstein is emphasizing the “importance of central bank independence” as former President Trump calls for more influence over the Federal Reserve.
Bernstein shared a May analysis from the White House regarding the value of an independent Fed, saying, “History could not be clearer regarding the lasting & damaging inflationary consequences of ignoring this lesson or reversing the hard-earned progress of the past half century.”
During a Thursday press conference, Trump said he believes “strongly” the “president should have at least [a] say” in the Federal Reserve.
Comparatively, the White House said the Biden-Harris administration believes in the “importance of an independent central bank,” calling it a “critical component” of the ability to control inflation.
In April, The Wall Street Journal reported that Trump’s allies drafted proposals that would attempt to carve out the Fed’s independence should he win in November.
Trump argued that he believes he has better instincts than others because he was “very successful” and “made a lot of money.”
Whoever wins the election, Trump or Vice President Harris, will have the ability to choose the next Fed chair.
Although the chair and its board of governors members are nominated by the president and are confirmed by the Senate, they are independent and able to make policy decisions.
Reuters reports some economists worry that if Trump is reelected, he could make moves similar to those of former President Nixon, who in 1972 pressured the Fed chair to maintain expansionary monetary policy despite the pressures of inflation.
The White House noted the pressures from Nixon in its report.
“A non-independent central bank can face political pressure to quickly goose the economy for political reasons, as when President Nixon pressured then Fed Chair Arthur Burns to engineer a favorable economy in time for the 1972 presidential election,” the report said. “But monetary policy takes a longer time to have its intended impact.”