'A lot of mess coming': Michael Steele warns of economic chaos if Trump takes over Fed

On Monday, the U.S. Senate confirmed President Donald Trump's latest pick for the Federal Reserve, Stephen Miran, on a party-line vote., allowing him to participate in Tuesday's meeting in which the Fed will likely vote on whether to cut interest rates. MSNBC host Michael Steele lamented that the president is now one step closer to forcing the nation's central bank to submit to his will.

During an interview with former Department of Justice (DOJ) prosecutor Ankush Khardori, Steele argued that Trump's moves to cement control of the Fed were creating a "very troubling economic environment." He noted that when the executive branch was constantly colliding with the judicial branch over how much control a president can have over an independent institution like the Fed, "the American people are the ones who get caught in the middle."

"One of the things that's i'm fascinated about is what does this look like on the other side of tomorrow?" Steele said.

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"The reality is, there's a lot of mess coming tomorrow, he continued. "And in some sense, this administration has – besides lying about that – have been hiding the ball from a lot of the American people and sort of telling them, 'oh, no, the economy is going to be great. Just let us get the power and the economy is going to be great.' But history has told us it's replete with examples where that's not the case."

Khardori responded to Steele's point by saying he felt particularly pessimistic about Trump's continued assault on the Fed's independence. He observed that while the Supreme Court has so far kept Trump's attempts to influence the Fed's board of governors, he has already made significant headway toward his goal of having loyalists in charge of monetary policy.

" Trump has already gotten a long way down the line of eliminating the independence of federal agencies. The Fed is just the last one that the Supreme Court has basically said, 'well, maybe this one might be special,'" Khardori said. "They didn't really give a very good reason, but they seem to understand politically that this would be a mess if they eliminated Fed independence entirely. So Trump has gotten a lot of what he wanted."

The Fed is expected to cut interest rates after tomorrow's meeting by 25 to 50 basis points. Even though Trump has been calling for rates to be lowered since the start of his second term, prominent economists have said that even a significant rate cut won't give the economy enough of a jolt to overcome the damage from Trump's tariffs and his mass deportations of undocumented immigrants whose labor fuels numerous critical economic sectors like agriculture, hospitality and healthcare.

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