President Donald Trump is set to visit the Federal Reserve on Thursday, as per the White House. This visit is seen as a direct escalation of Trump’s ongoing pressure on the Fed and its Chairman, Jerome Powell.
What Happened: The White House announced on Wednesday that Trump will be visiting the Federal Reserve on Thursday, CNBC reported. This will be the first time in nearly 20 years that a U.S. President has officially visited the central bank.
Traditionally, U.S. presidents have upheld the Federal Reserve’s independence, which is both legally and practically protected from political interference. However, Trump’s visit is viewed as a symbolic challenge to that independence, as he persists in criticizing Powell for not cutting interest rates.
Trump has repeatedly voiced his disapproval of Powell’s decision not to cut interest rates, even suggesting the idea of firing him. The President has openly discussed the possibility of removing Powell, despite legal uncertainties surrounding his authority to do so.
“I think he’s done a bad job, but he’s going to be out pretty soon anyway,” Trump said earlier this week at a White House event. However, Powell has stated that his firing is “not permitted under the law.”
Why It Matters: The visit comes amid a series of events that have seen Trump ramp up pressure on Powell and the Fed. This includes Trump’s criticism of the Fed’s “mission creep” and the effectiveness of its officials, as well as suggestions from notable figures like economist Mohamed El-Erian that Powell should consider resigning to protect the Fed’s autonomy.
Meanwhile, former Fed chairs Ben Bernanke and Janet Yellen have warned of the long-term consequences of Trump’s pressure on Powell, emphasizing the importance of maintaining the central bank’s independence.
Despite Trump’s pressure, some experts, such as LPL Financial’s Chief Economist Jeffrey Roach, have argued that the Fed’s current rates are justified given the U.S. economic situation compared to its G-10 peers. On a previous occasion, Jerome Powell mentioned that the Fed is not lowering the rates due to Trump’s tariffs.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
