Trump’s allies are preparing proposals that would limit the central bank’s independence

A small group of the former president’s allies created a roughly 10-page document outlining the central bank’s policy vision, according to the WSJ.

The group says the Fed should consult with Trump on interest rate decisions and that Trump should have the power to remove Jerome Powell as Fed chief before his term ends in 2026.

Trump picked Powell to lead the central bank in 2017, but soon turned against him. In February of this year, he said he would not reappoint Powell if elected president.

Trump’s media company lost 1.4 billion last year, shares fell sharply

Economy

He also thinks the Fed will cut interest rates under Powell to improve Joe Biden’s re-election prospects. Lower rates benefit businesses because they reduce their borrowing costs and ultimately help the economy as a whole.

The WSJ notes that it cannot determine whether the former president is aware of these behind-the-scenes efforts, or even supports them. But some people close to the discussions think Trump is on board with the plans.

Trump has already informally talked with advisers about possible candidates for the head of the Fed. He even asked some of them if they would be interested in this job, writes the WSJ. The Trump campaign did not immediately respond to a Reuters request for details.

Central banks are independent institutions in democratic countries that determine monetary policy and thus have a major influence on the economy. The base interest rate in the US has been in the range of 5.25 to 5.50 percent since last year, which is the highest since 2001.

Until recently, economists expected that the Fed would start cutting interest rates soon, but the renewed higher growth of inflation, according to most of them, pushes this assumption to the end of the year.