In response to multiple interest rate cuts by US President Donald Trump, four former Fed officials have called for the Federal Reserve’s independence.
The Fed and its chairman must be able to act independently and in the best interest of the economy, wrote Paul Volcker, Alan Greenspan, Ben Bernanke and Janet Yellen in the Wall Street Journal.
„It is important to preserve the ability of the Federal Reserve to make decisions in the best interest of the nation, not based on the interests of a small group of politicians,“ the four surviving ex-Fed presidents said.
Reaction to Trump demands
They are reacting to the unusual pressure Trump has been exerting for months on the central bank and its nominated chairman Jerome Powell. Repeatedly Trump criticized the currency guardians as „unaware“ and threatened Powell with being able to dismiss him if necessary.
Trump demands interest rate cuts to fuel the economy. Even after the first interest rate cut by the Fed in more than ten years last week, he criticized the central bank sharply. He accused Powell of abandoning the country because no further reduction was in sight.
Yesterday, he also dealt a blow to the Fed with reference to the devaluation of the Chinese currency renminbi, which put the US under pressure in the trade dispute and led to sharp price falls on the stock markets.
