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President Donald Trump, Fed President Jerome Powell’s meeting with the house to meet to be fired talks about the meeting with Republicans.
According to the JP Morgan research note, President Donald Trumps Efforts to reduce the federal reserves to reduce the federal reserves can cause the risk of violating the independence of the Central Bank, inflation or political money policy risk increasing errors.
Trump has repeatedly reduced the expenses of the Central Bank’s interest rates, and the economy and the service of the United States, which is more than $ 36 trillion. He proposed several times that he could try to shoot the Federal Reserve Department Jerome powderonly to retreat and repeat calls for low prices.
This week, Trump acknowledged the potential firing in the meeting with Republicans, he said he opened the potential shooting potential, but he said he did not think that journalists would advance to that plan.
Michael Feroli, President of the JP Morgan, said in connection with the potential removal of Powell on Wednesday.
President Trump’s Fed Chairman’s efforts to reduce the interest rates of Powell were able to violate the independence of the Central Bank’s monetary policy. (Getty Images / Photo illustration / Getty Images)
He noted that a member of the Federal Law prohibits the removal Federal reserve Usually, unlike the differences of interest rate levels, except for the “reason”, which usually covers the examples of material-incompetence or duty.
“The reason the discussed reason is the cost of repairing the main building of the Fed in Washington.
Recently Supreme Court Sentence, crujka v. Wilcox has allowed the President to eliminate the member of the National Labor Relations Department, which is “for the reason”. The verdict referred to the Fed as a separate case and distinguished the governors of the Central Bank as an “unparalleled, quasi-private enterprise.
Powell reveals what to do for him to leave Fed
President Trump, as the Department of Fed in 2017, has criticized Powell many times since today. (Goal Loeb / AFP via Getty Images / Getty Images)
Efforts to remove Powell or erase the role of the Fed as the Chairman of the Fed may weaken the Central Bank’s independence Confidence of financial markets If in the United States, if it is more sensitive to political effects in monetary policy.
Feroli explained that economists are generally useful to remove the political period from the political period, because the short-term horizon of the election calendar is trying to stimulate the economy when not inappropriate in the long place of prospects. ”
For example, low interest rates can be economically and increase Inflation pressures When inflation in the economy, inflation is raised or increasing, the cutting rates can increase more price increase.
Goldman Sachs says the Central Bank’s independence is an economic echo
Fed President Powell faced questions about the repair project of the headquarters of the Central Bank. (Getty Images / Getty Image by Olivier Destiyery / AFP)
The world’s economic research, when the central banks have greater political independence, the US footprint record in clashes between the President and the Central Bank has revealed higher inflation.
“Although international evidence is more prone to political independence, the historical record, the historical record, the historical record, which contributes to a weak monetary policy for inflation development in the late 70s.
In the current context, Feroli said that the violation of the Fed’s independence increases the risk of higher inflation, but also increased interest rates US National Debt To take into account the risks that will break American financial problems.
