Many Democrats on Capitol Hill are highly critical of President Donald Trump’s efforts to influence the U.S. Federal Reserve, arguing that maintaining the Fed’s independence is crucial. But Democrats aren’t the only ones in Washington who want Trump to leave the Fed alone.
GOP lawmakers, according to Semafor’s Eleanor Mueller, are debating how much influence Trump should have over the Fed — and whether or not Jerome Powell should continue to serve as chairman after his term ends.
In an article published on February 12, Mueller explains, “Republicans are divided over the Trump Administration’s calls to meddle with the Federal Reserve’s leadership — a schism on vivid display this week as Chair Jerome Powell prepares for his second day of congressional testimony. Multiple members of President Donald Trump’s orbit have endorsed proposals that would give the White House more control over the officials atop the central bank, including empowering the president to fire Fed governors at will and replacing Powell, whose term expires in 2026, with former Rep. Ron Paul, R-Texas. GOP lawmakers previously steered clear by focusing their attention on more limited reforms, like requiring it to base its decision-making on specific rules.”
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Sen. Cynthia Lummis (R-Wyoming) is being overtly critical of Powell. On February 11, the GOP senator tweeted, “In the real world, if you break the rules, you get fired. Somehow, we’ve let Chair Powell break the law, yet he continues to wield enormous power. The buck stops here.”
But Rep. Pete Sessions (R-Texas), according to Mueller, isn’t expecting any leadership changes at the Fed.
Sessions told Semafor, “We’re more interested in the large reach, and that is the money that has been borrowed — where the money is, and how the money is getting paid back.”
Meanwhile, Democrats, according to Mueller, are “lining up behind Powell in a show of support for central bank independence — even when doing so means putting aside longstanding differences.”
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Sen. Elizabeth Warren (D-Massachusetts) recently told reporters, “Look, I disagree with him on monetary policy, I disagree with him on regulatory oversight of the giant banks, and I disagree with him on Fed ethics — but I have no reason to doubt that he is a principled public servant, and it is important that the Fed maintain its independence that’s clearly under threat.”
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