When officials meet to decide where interest rates should be, they don’t consult the president and other elected officials — and for good reason.
That’s because, as one former Federal Reserve chair famously said, central bankers’ job is to remove the punchbowl right when the party is just getting started.
I feel that strongly,” Trump said at a press conference in August, referring to the Fed’s interest rate decisions.
Lowering interest rates too soon could’ve risked reigniting inflation, which is currently just a tenth of a percentage point higher than the Fed’s 2% target.
That’s why countries with independent central banks generally have lower inflation, Fed Chair Jerome Powell told reporters in September after central bankers lowered rates by a half point.
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