The American Central Bank, the Fed, stepped up to the plate on Thursday to defend its sacrosanct independence in the face of Donald Trump who makes no secret of his desire to influence its decisions, without however explicitly mentioning it.
The Fed’s decisions “cannot be overturned by any other part of the government, except, of course, Congress,” Fed Chairman Jerome Powell said at a conference in Dallas, Texas.
The upcoming return of Donald Trump to the White House has raised fears about the Fed’s ability to resist political pressure.
Donald Trump has not hidden his desire to influence his decisions. In August, he felt that “the president should at least have his say”.
And when the institution began a first rate cut in September, a few weeks before the November 5 election, the then Republican candidate accused it of playing the game of the Democratic candidate.
“We don’t think, when we make our decisions, about the well-being of a political party or anything like that. We are just looking at the macroeconomic aspects and doing our best,” assured Jerome Powell.
“Until the end of my mandate”
He also cited the “numerous research” carried out on the subject, which “shows that central banks which are independent […] other parts of the government, are doing a better job on inflation.”
“And that makes perfect sense, because […] we don’t think about other political factors that, frankly, would distract from the already difficult work that we have to do,” he continued.
During his first term, Donald Trump broke with custom and commented on the Fed’s decisions, even attacking its officials head-on – including Jerome Powell whom he himself promoted to head of the central bank – when rates did not were not falling fast enough for his liking.
Jerome Powell also reiterated that he did not intend to leave his post before the end of his mandate, in May 2026: “I will serve until the end of my term as president, and that is all I I decided.”
Last Thursday, during the press conference he held after the Fed meeting, he curtly answered “no” to a journalist who asked him if he was considering resigning. And he recalled that forcing him to leave was “prohibited by law”.
“Isolated from external forces”
The president of the monetary policy institution, however, refrained from mentioning the name of Donald Trump. Fed officials are usually very cautious and carefully avoid commenting on the political situation.
Jerome Powell’s words are therefore particularly strong. And they are all the more so since, Thursday morning, a governor of the Fed, Adriana Kugler, had, from Montevideo, in Uruguay, given a long speech on the subject.
Without ever naming Donald Trump, nor explicitly mentioning the political situation in the United States.
“Congress asks us […] to be objective, independent, to be isolated from external forces to make our decisions, […] and this is what we do every day,” said the manager.
“We are committed to our mandate,” she also stressed.
One of Donald Trump’s close friends, Scott Bessent, whose name is being mentioned to become Treasury Secretary, has put on the table the hypothesis of a “shadow president” of the Fed, whose presence would aim to ensure that the real president of the institution no longer has any influence.
“When the central bank is independent, the role of governments […] generally involves representing the population by specifying a mandate for the central bank and holding it accountable by monitoring its performance and appointing its leaders,” said Adriana Kugler.
To watch on video
Related News :