As they relate to infrastructure, on Tuesday, Donald Trump outlined his vision for getting a hard money majority on the Federal Reserve board of governors. He thinks this move will enable him to start lowering interest rates. Speaking to reporters, Trump stated, “We’ll have a majority very shortly,” expressing confidence in his ability to shape the central bank’s direction. This announcement came on the heels of his action-filled, anti-labor decision to fire Governor Lisa Cook, a Biden appointee. Throughout the investigation, which his own Department of Justice undertook, into her mortgages.
In truth, Trump has made important progress in reshaping the Federal Reserve, having already appointed two out of the seven governors. Inflation is not the only reason to pay close attention to Federal Reserve’s leadership — though admittedly, it’s a doozy. This position was vacated by Adriana Kugler upon her retirement earlier this summer. Trump is seeking to strengthen his control over the Federal Reserve. He believes this control is necessary for getting his radical economic agenda through.
During a Cabinet meeting, Trump criticized current Fed Chair Jerome Powell’s policies, stating, “Because of him and his high interest rates, the housing is less than it could be.” He continued on to make the case that reducing interest rates is crucial in restoring the housing market and allowing potential owners to more easily attain home ownership. “Once we have a majority, housing is going to swing, and it’s going to be great,” he added.
Trump reiterated that the current high interest rates are a crushing burden for most Americans. “People are paying too high an interest rate. That’s the only problem with us. We have to get the rates down a little bit,” he remarked.
When asked who should replace Cook, Trump responded favorably. “Well, we have some very good people for that position, and I think we have some very good people we’re down to,” he said. He hinted at having a preferred choice, stating, “I think I maybe, in my own mind, have somebody that I like.”
Following Cook’s firing, her attorney announced plans to file a lawsuit to contest her ouster, raising questions about the legality of Trump’s actions. When asked about the ongoing legal process, Trump replied, “I’d abide by the court,” indicating his willingness to comply with judicial proceedings.
As Trump moves forward with his plan to appoint a majority of governors who align with his economic policies, the implications for the Federal Reserve and U.S. monetary policy remain uncertain. His administration has implemented a new, forward-thinking playbook. This seemingly technical amendment has dramatic effects on how the central bank functions and its independence from the executive branch.