91download.com supports a wide range of platforms, including YouTube, Facebook, Twitter, TikTok, Instagram, Dailymotion, Reddit, Bilibili, Douyin, Xiaohongshu and Zhihu, etc. Click the download button below to parse and download the current video
As the clock ticks down to the 2024 presidential election, the Federal Reserve finds itself under the microscope. The burning question: Will the Fed act if the economic case is marginal? The institution's chairs have always maintained that their decisions are economy-driven, not election-cycle influenced. But can they stay true to their word amidst political pressures?
Inflation tops the list of U.S. adults' concerns, as a May 2024 survey reveals. Yet, stabilizing prices is the Fed's domain, not the President's. A plan to tackle inflation starts with respecting the Fed's independence—a principle that experts urge presidents to uphold. The central bank's power is unparalleled, and any executive interference could pave the way for a presidency that mirrors monarchy.
Donald Trump's contemplation of exerting influence over the Fed highlights a growing concern: the potential for future presidents to manipulate the central bank due to the U.S.'s fiscal position. The Fed's decisions significantly impact voter perceptions of the economy, yet they are supposed to remain untouched by political tides. Independence is key to better monetary policy, and the Fed's governors are designed to be beyond the executive's reach.
The appointment of governors has become increasingly politicized, with the president nominating seven members of the Federal Reserve Interest Rate Committee. The current composition reflects a mix of appointments from both President Biden and former President Trump, with Jerome Powell, the chair, enjoying bipartisan approval. The chair's position is not a political appointment, typically surviving across party changes.
History offers a cautionary tale in the form of President Nixon's pressure on Fed Chair Arthur Burns. Nixon's expectation that Burns would be a party loyalist led to a series of conversations that compromised the central bank's independence. The result was a temporary win for Nixon but a long-term hit to the economy, as his artificial controls on wages and prices led to a surge in inflation.
The Fed's reaction to economic shocks, like the financial crisis and the pandemic, has been swift and clear. In 2024, the central bank signaled potential interest rate cuts, only to hedge on its forecast due to inflation not meeting target rates. The current restrictive policy rate aims to gradually slow down the economy without pushing it off a cliff.
President Biden has pledged to avoid interference in the Fed's tasks, while Trump's allies are reportedly drafting proposals to weaken the Fed's independence. Trump's presidency saw him openly criticize the Fed for tight policies, leading to lower rates than might have been otherwise. The White House has since emphasized the importance of central bank independence, a principle that has historically protected economic stability.
In conclusion, as the 2024 election looms, the Federal Reserve must navigate a treacherous path between politics and economics. The institution's ability to maintain its independence will be crucial in ensuring that monetary policy serves the economy rather than political agendas. The question remains: Can the Fed stay true to its mission, or will it succumb to the pressures of election-year politics?
Share on Twitter Share on Facebook