Donald Trump downplayed criticism that he was undermining the autonomy of the US Federal Reserve and said he should be able to freely express his views on interest rate policy.
“I think it’s OK for a president to talk. That doesn’t mean he has to listen,” Trump said Monday in an interview with Bloomberg News after an event in the swing state of Pennsylvania.
Trump said he “chatted” with Fed Chairman Jerome Powell about interest rates during his tenure in the White House and “that may have had an effect, but it may not have had an effect.”
“It’s perfectly acceptable for a president to talk about interest rates, because I think I have very good instincts,” he said. “That doesn’t mean I’m in charge, but it means I should have the right to talk about it like anyone else.”
High interest rates have increased focus on the Fed’s decisions as mortgage costs have hampered prospective homeowners. Vice President Kamala Harris last week unveiled her plan to make homeownership more affordable by giving first-time buyers a $25,000 down payment.
Trump called the idea a “big mistake” and said it would lead to a greater housing shortage and drive up real estate prices.
Still, Trump said, “I could do that,” when asked if he would offer anything to prospective homebuyers who are having trouble making the down payment.
Giving the executive branch more influence would challenge the long-standing practice of allowing the US Federal Reserve to pursue monetary policy – namely, setting interest rates – independently of political actors.
Since the Clinton administration, presidents of both parties have also refrained from commenting on Fed decisions and interest rates more broadly to avoid the false impression – and market fears – that they are trying to influence the central bank.
Trump’s appearance on Monday is part of a multi-pronged campaign strategy aimed at countering Harris’s coronation as the Democratic presidential nominee, securing support in key swing states and, most importantly, focusing on the economy, an issue that polls show is at the top of voters’ agendas and on which he has held a lead over President Joe Biden and Harris for most of the 2024 cycle.
Polls have shown Harris catching up with or overtaking him. Before Harris replaced Biden at the top of the Democratic ticket, a central part of Trump’s campaign strategy was to stoke the nostalgia voters had shown in polls for the pre-Covid-19 economy he led.
At a press conference earlier this month, Trump said the Fed had moved “a little too early and a little too late” in adjusting interest rates. As a businessman, the former president also had “better instincts than, in many cases, people in the Federal Reserve or its chairman.”
On Monday, he declined to say who he might appoint as Fed chairman, saying, “It’s far too early.” The former president had previously said he would not reappoint Powell, whose term as chairman ends in 2026. Trump has attacked Powell in the past, saying the central bank and its chairman have “no guts, no brains, no vision!”
Harris differed from Trump on the issue of central bank autonomy. Earlier this month, she told reporters she “couldn’t disagree more strongly” with his view on Fed independence and that as president she would “never interfere in the Fed’s decisions.”
History shows that countries that give politicians control of their monetary policy face higher inflation. In the U.S., former President Richard Nixon pushed then-Fed Chairman Arthur Burns to loosen monetary policy in the early 1970s, triggering a costly inflationary boom-bust cycle.
Election campaign
The Republican candidate’s comments on Monday followed a speech on economic and energy policy during a visit to Pennsylvania, part of a week-long blitz that is taking him to key swing states to divert attention from his opponent while Harris and her party convene in Chicago for the Democratic National Convention.
Trump is ramping up his campaign this week, planning visits to Michigan, North Carolina and Arizona. He and his surrogates will also hold daily press conferences in an attempt to create a contrast with Harris, who has not given an interview since being nominated as her party’s nominee. Harris has promised to do so by the end of the month.
Trump visited a machinery and manufacturing facility in York, Pennsylvania, on Monday to unveil his economic agenda. Republican allies have pressed Trump in recent weeks to focus more on issues such as the economy and immigration – seen as political liabilities for Harris.
A Washington Post-ABC News-Ipsos poll released Sunday showed Harris leading Trump, 49% to 45%, but the former president has a nine-point lead on the economy. Trump has vowed to extend expiring tax cuts and impose tariffs on U.S. allies and opponents if he returns to power.
