Trump Redefines Fed Independence as Agreement With Trump
President Donald Trump unveiled a new standard for Federal Reserve independence Sunday, declaring that the central bank must remain free from economic data, professional judgment and any interest-rate decision not personally approved at one of his golf properties. Speaking before the Fed’s September meeting, Trump demanded that the United States receive the world’s lowest borrowing costs “regardless of their formulas,” explaining that inflation, employment and financial stability are technical distractions from the more reliable indicator of what he wants by lunchtime.
The president said America’s strength logically entitles it to nearly free money, much as a wealthy borrower’s excellent self-esteem entitles him to forget invoices. “We’re the strongest country, everybody says it, so naturally our money should be practically free, maybe they pay us to borrow it,” Trump said. “That’s how credit works when you’re a tremendous nation with very beautiful numbers that formulas refuse to understand.” Economists noted that this theory reverses several centuries of lending practice but agreed it would substantially reduce the administration’s exposure to arithmetic.
Federal Reserve officials now face the delicate task of controlling inflation while proving their complete autonomy by reaching exactly the conclusion Trump announced in advance. Kevin Warsh, Trump’s choice to lead the central bank, is expected to consider the full range of independent options, from a large rate cut to a larger rate cut accompanied by a statement praising the president’s instincts. National Economic Council Director Kevin Hassett said Trump would defend Fed independence “above all,” provided independence does not become confused with disobedience.
Administration officials said the new framework replaces outdated monetary policy with national self-esteem. Interest rates will be based on American greatness, inflation will be counted only when Trump notices a price, and bond markets will be instructed to stop being so negative. Employment reports that support the president will remain official statistics, while unfavorable reports will be transferred to the deep state’s fiction department. The reform also simplifies the Fed’s dual mandate of stable prices and maximum employment into a single duty: making presidential demands sound like economic analysis. Under the new system, the Federal Reserve is fully independent because Donald Trump has independently decided what it must do.
* None of the quotes in this article were spoken by an actual person. More info.