Four former Federal Reserve chiefs made a joint plea for the central bank to be able to operate without political pressures or the threat of removal of its leaders, responding to President Trump’s persistent attacks on current chairman, Jerome Powell.
“We are united in the conviction that the Fed and its chair must be permitted to act independently and in the best interests of the economy, free of short-term political pressures and, in particular, without the threat of removal or demotion of Fed leaders for political reasons,” Janet Yellen, Ben Bernanke, Alan Greenspan and Paul Volcker said in an op-ed in The Wall Street Journal.
In the latest move to pile pressure on the Fed, the president said that a decline in the yuan on Monday — which fell below the psychologically important level of seven per dollar — is called “currency manipulation” and indicated he’d like the Fed to act to counter the Chinese action. His Treasury Department later in the day said it had formally labeled China a currency manipulator.
Trump has upended almost three decades of White House practice of avoiding public remarks on the Fed out of respect for its independence.
Last week, Trump called for a “large” cut in the benchmark rate as the Federal Reserve held a two-day meeting. He later took to Twitter to slam the Fed’s decision to cut by just 25 basis points. And while the Fed chief played down expectations of more cuts to follow, Trump said he should’ve done the opposite.
Powell has said repeatedly that he intends to serve his full four-year term as chair and that “the law is clear” on that issue. In response to a question from lawmakers during his testimony before Congress last month, Powell said he wouldn’t step down from his job if Trump attempted to fire him.
“It is critical to preserve the Federal Reserve’s ability to make decisions based on the best interests of the nation, not the interests of a small group of politicians,” the former Fed chairs said in the op-ed.
