Forbes Media CEO Steve Forbes breaks down the Fed’s continuing efforts toward a soft landing and discusses the 2024 election on “Cavuto: Coast to Coast.”
Former President Trump’s vice presidential running mate, Republican Sen. J.D. Vance of Ohio, on Sunday supported Trump’s call for the president to have a say in the Federal Reserve’s policy-making process, including decisions to raise interest rates, saying they should be “political decisions.”
Vance made the remarks in an interview on CNN’s “State of the Union” after President Trump said Thursday that “the president should at least have a say” in how the Fed sets monetary policy.
“I agree with him,” Vance said of Trump. “This should fundamentally be a political decision. Whether you agree or disagree, our elected leaders should have a say in the most important decision facing our country.”
Vance added that it would be a “significant change” to move away from the Fed’s longstanding position that monetary policy decisions should be made independent of political influence from elected officials.
Trump suggests he should have a say in Federal Reserve policy
Senator J.D. Vance said he agrees with his running mate, former President Donald Trump, that the president should have some say in the Federal Reserve’s monetary policy decisions. (Emily Elconin/Bloomberg/via Getty Images)
He emphasized that in his and Trump’s view, the president “should not dictate” monetary policy, adding, “Just to be clear, I think President Trump is saying something really important and really significant that the political leaders of this country should have more of a say in the monetary policy of this country.”
“If the American people don’t like our interest rate policy, they should elect someone else to change it. Democratic debate should not take precedence in this country when it comes to the big issues facing our country,” Vance said.
“The president should at least have a say,” Trump said at a news conference Thursday from his Mar-a-Lago, Florida, home, adding, “In my case, I’ve made a lot of money, I’ve been very successful, and I think in many cases I have better instincts than the people who become board members and chairs of the Federal Reserve.”
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“Whether you agree or disagree, America’s elected leaders should have a say in the most important decisions facing our country,” Senator Vance said. (Chip Somodevilla/Getty Images)
During his time in office, Trump frequently attacked Fed policymaking and the central bank’s leadership, frequently criticizing Chairman Jerome Powell, whom he appointed to the job in 2017, for raising interest rates, threatening to fire him and calling him a “moron.”
In his remarks on Thursday, Trump criticized the Fed for getting “wrong on a lot of things” and accused Chairman Powell of raising interest rates “a little too early, a little too late.”
The Federal Reserve’s monetary policy decisions are made independent of politicians’ opinions, ensuring that policy decisions that support the central bank’s dual mission of promoting price stability and full employment are made without short-term political considerations.
Fed keeps interest rates at 23-year high but hints at possible rate cut
Chairman Jerome Powell said last month that there is strong support in Congress for the Fed to remain independent. (Kevin Dietsch/Getty Images)
Chairman Powell has repeatedly stressed the importance of the Fed’s political independence and said criticism from President Trump or other politicians will not influence the Fed’s monetary policy decisions.
“Price stability is the foundation of a healthy economy and provides immeasurable benefits to the American people over the long term,” Chairman Powell said at the January 2023 conference. “But restoring price stability at a time of high inflation may require taking unpopular measures in the near term to raise interest rates and slow the economy. Our lack of direct political control over our decisions allows us to take these necessary measures without consideration of short-term political factors.”
“I think there’s very strong support in both parties in Congress for Fed independence where it really matters,” he said at a July conference.
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Former President Trump said that if he were elected, he would allow Federal Reserve Chairman Jerome Powell to serve out the remainder of his term but would not reappoint him. (Olivier D’Oulliery/Bloomberg/via Getty Images)
Powell’s second term as Fed chair ends in May 2026, and his seat on the Fed’s board of governors runs until 2028.
President Trump has said he would allow Powell to complete his term if he wins the November election, but added that he would not reappoint Powell for a third term.
“I think he’s political,” Trump said in a February interview with Fox Business’ Maria Bartiromo. “I think if he lowers interest rates, he’s probably going to do something that helps Democrats.”
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Vice President Kamala Harris, who formally became the Democratic presidential nominee earlier this month after President Biden withdrew from the race in July, said Saturday that the president
“The Fed is an independent institution and as president I will never interfere with the Fed’s decisions,” Harris told reporters in Arizona.
FOX Business’ Megan Henney and Reuters contributed to this report.
