The New Yorker:

The President’s campaign to bend the independent central bank to his will is straight out of the playbook of populist strongmen and will likely go on for years.

By John Cassidy

As a temporary distraction from the Jeffrey Epstein story, Donald Trump’s visit last week to the headquarters of the Federal Reserve, an independent institution that previous Presidents largely stayed away from, served its purpose. Footage of Trump and Jerome Powell, the Fed chairman, wearing white hard hats and sparring about construction costs as they toured the site, which is under renovation, quickly made their way onto social media and the home pages of major news organizations. For the President, however, the visit was also about something more substantive: continuing his lengthy pressure campaign on Powell, who looked a bit uncomfortable as he walked Trump through rooms that had been stripped back to their walls and beams.

Since taking office for a second time in January, Trump has repeatedly criticized Powell, whom he appointed in 2017, and his agency for not cutting interest rates quickly enough. “Numbskull,” “moron,” and “Mr. Late” are some of the epithets he has used. Thus far, Trump has held back from trying to fire Powell, whose term runs until next May. But, in verbally attacking him and demanding policy changes, he is following the playbook of other populist authoritarians, including Hungary’s Viktor Orbán and Turkey’s Recep Tayyip Erdoğan. In 2018, Erdoğan issued a Presidential decree giving him the power to dismiss the governor of Turkey’s central bank. Between 2019 and 2024, he forced out four governors who had chafed at his demands for low interest rates regardless of soaring inflation. The reasons strongmen clash with central-bank chiefs aren’t hard to discern: They often come to power promising to improve the livelihoods of their supporters by boosting employment and reducing the cost of living. But an independent central bank denies them control of one key tool for stimulating the economy quickly—the ability to cut interest rates. Moreover, to any self-respecting strongman, the very notion of an independent power center is offensive, especially one that is expressly designed to take key policy decisions out of the political realm. Conflict is virtually guaranteed.

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