Why the Damage to Fed Independence May Have Already Been Done | Odd Lots

There’s a long history of US presidents putting pressure on the Federal Reserve to lower interest rates, but the techniques have often been subtle or quiet in some way. Under President Trump, attacks on the Fed have risen to a whole new level. And it’s not just Trump that’s called on Chair Jerome Powell to cut rates. Other members of his administration (along with allies in Congress) have been hammering him both on policy and also topics unrelated to monetary policy, such as the cost of renovating the Federal Reserve building in Washington. Investors are taking seriously the prospect that Trump will find a way or a reason to remove Powell before the end of his term next year. And regardless of when Powell is replaced, there’s a widespread anticipation that the next Fed chair will be someone more closely resembling a Trump loyalist. So do we still have an independent Fed at this point? On this episode, we speak with University of Texas-Austin economics professor Carola Binder about why central bank independence is so cherished by economists, why mere criticism of the Fed could be inflationary, and whether Fed independence has been permanently damaged. Read More: Odd Lots Newsletter: Central Bank Independence Is a Spectrum (https://bloom.bg/44WdgMD) What Happened the Last Time a Fed Chief Was Bounced (https://bloom.bg/4kPXh8K) Only Bloomberg.com subscribers can get the Odd Lots newsletter in their inbox — now delivered every weekday — plus unlimited access to the site and app. Subscribe at bloomberg.com/subscriptions/oddlots (https://www.bloomberg.com/subscriptions/oddlots?in_source=oddlotspodcast) See omnystudio.com/listener (https://omnystudio.com/listener) for privacy information. Bloomberg's Joe Weisenthal and Tracy Alloway analyze the weird patterns, the complex issues and the newest market crazes. Join the conversation every Monday and Thursday for interviews with the most interesting minds in finance, economics and markets. Subscribe to Bloomberg Podcasts: https://bit.ly/BloombergPodcasts Check out more Odd Lots: https://youtube.com/playlist?list=PLe4PRejZgr0MuA6M0zkZyy-99-qc87wKV Get the Odd Lots newsletter via https://www.bloomberg.com/account/newsletters/oddlots And for all things Odd Lots, visit https://www.bloomberg.com/oddlots Visit our other YouTube channels: Bloomberg Television: https://www.youtube.com/@markets Bloomberg Originals: https://www.youtube.com/bloomberg Quicktake: https://www.youtube.com/@BloombergQuicktake #Bloomberg #Podcast #OddLots Visit us: https://www.bloomberg.com/podcasts Follow Bloomberg Podcasts on Twitter: https://twitter.com/podcasts For coverage on news, markets and more: http://www.bloomberg.com/video

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