GOP insiders privately fear Trump’s 'ill-advised' vendetta against Fed chair is 'likely to backfire'

22 April

U.S. Federal Reserve Chairman Jerome Powell on May 3, 2023 (Federal Reserve/Flickr)

President Donald Trump continues to angrily rail against Federal Reserve Chairman Jerome Powell, calling for him to be fired and attacking him as a "loser" on his Truth Social platform. And some of Trump's critics believe he is playing with fire.

Washington Post columnist Catherine Rampell, recently hired as a weekend host on MSNBC, considers Trump's feud with Powell an even bigger economic threat than his steep tariffs.

Rampell recently told MSNBC host and former Republican National Committee Chairman Michael Steele, "To be clear, the tariffs are abysmal.... Firing Jerome Powell would be much worse. It could set off a global financial crisis.... If we no longer have an independent central bank, that's going to set off a cascading effect around the world."

Many GOP lawmakers and their aides are afraid to publicly criticize Trump, but that doesn't mean they aren't expressing their worries in private. In an article published on April 22, The Hill's Alexander Bolton takes a look at Republicans who, privately, worry that nothing good can come from Trump's disdain for Powell.

A senior GOP aide, interviewed on condition of anonymity, told The Hill that Senate Republicans "care a heck of a lot" about the Fed's independence from the White House.

The aide told The Hill, "Republicans on the (Senate) Banking Committee and even the (House) Financial Services Committee have a lot of faith in Powell and think it would be ill-advised to undermine his economic agenda by dismissing Powell or prematurely cutting rates. Powell's got good relationships with (Capitol) Hill."

A GOP strategist, according to Bolton, "warned that Trump's efforts to pressure Powell are likely to backfire, as have past efforts to intimidate the independent Fed."

The strategist, also quoted anonymously, told The Hill, "It usually backfires. I think people are concerned about that…. Certainly, the old-school people are thinking, 'This isn't going to work'….. The market is all based on emotions and vibes, so getting rid of that stability amidst everything else would be very bad. I'm sure that (Treasury Secretary Scott) Bessent and (Commerce Secretary Howard) Lutnick are telling the president that."

Axel Merk, president of the firm Merk Investments, believes it is crucial for the Fed to maintain its independence.

Merk told The Hill, "A lot of bad stuff can happen when you have political interference. Countries that have interfered [politically] in the monetary policy have had very bad outcomes."

Read Alexander Bolton's full article for The Hill at this link.

From Your Site Articles