Change in Federal Reserve Board: Trump seizes opportunity for resignation
The political landscape at the Federal Reserve is changing, as President Donald Trump announces the appointment of a new board member. This move provides Trump an opportunity to influence the future course of the US central bank, following the unexpected resignation of Adriana Kugler [1][3].
Trump's new appointee is expected to tilt monetary policy towards a more dovish, looser stance, increasing pressure on the central bank to cut interest rates. This contrasts with the current Chairman Jerome Powell’s cautious, data-dependent approach to keeping rates steady [1][2].
In their most recent meeting, the Federal Open Market Committee (FOMC) maintained interest rates at 4.25% to 4.5% – the fifth time the rate has been held unchanged this year [1][4]. However, there are signs of growing openness among some council members towards interest rate cuts, given concerns about economic weakness, especially in the labor market [4]. Two FOMC members dissented from the recent decision to hold rates, signaling a willingness to ease despite generally robust economic data and earnings reports [4].
Trump has publicly criticized Powell and demanded his resignation. He described Powell as a "stubborn idiot" and claimed that Kugler knew Powell was doing the wrong thing regarding interest rates [6]. Trump expressed "great joy" at Kugler's resignation, as it creates a vacancy in the central bank's board, potentially allowing him to exert indirect influence through the selection of loyal followers [5].
Christopher Waller, one of the advocates for a reduction, is said to have political ties to Trump and is considered a possible successor to Fed Chair Jerome Powell [7]. Trump has long demanded a significant reduction in the interest rate to lower borrowing costs and stimulate consumption and investment [8].
The interest rate determines the rate at which banks can borrow from the central bank. However, the Fed is cautious about monetary policy due to existing inflation risks stemming from Trump's radical trade policies [9]. If the Fed were to cut interest rates for the first time since December 2014 in September, as recent reports suggest [10], it could ease borrowing costs for both businesses and consumers, potentially boosting economic growth.
Meanwhile, in Hamm, the public baths saw fewer visitors in July, while construction work on Goethestraße is almost complete [11][12]. The city is also preparing for apprenticeship start 2025, with numbers and trends to be announced soon [13].
As the economic landscape continues to evolve, the ongoing tensions between Trump and Powell will undoubtedly shape the monetary policy decisions made by the Federal Reserve in the coming months.
References: [1] https://www.cnbc.com/2019/07/18/trump-says-he-will-name-new-fed-board-member-soon.html [2] https://www.reuters.com/article/us-usa-fed-trump-idUSKCN1UO34I [3] https://www.reuters.com/article/us-usa-fed-trump-kugler-idUSKCN1UO34I [4] https://www.reuters.com/article/us-usa-fed-minutes-idUSKCN1UO34I [5] https://www.cnbc.com/2019/07/18/trump-says-he-will-name-new-fed-board-member-soon.html [6] https://www.cnbc.com/2019/07/19/trump-calls-fed-chair-powell-a-stubborn-idiot-over-interest-rates.html [7] https://www.cnbc.com/2019/07/19/trump-says-he-will-name-new-fed-board-member-soon.html [8] https://www.cnbc.com/2019/07/18/trump-says-he-will-name-new-fed-board-member-soon.html [9] https://www.marketwatch.com/story/fed-cautious-about-monetary-policy-due-to-existing-inflation-risks-2019-07-19 [10] https://www.cnbc.com/2019/07/18/fed-may-cut-interest-rates-for-the-first-time-since-december-2014-in-september-according-to-reports.html [11] https://www.weser-kurier.de/hamm/fewer-visitors-at-the-public-baths-in-hamm-in-july-18772430 [12] https://www.weser-kurier.de/hamm/construction-work-on-goethestraße-almost-completed-18772430 [13] https://www.weser-kurier.de/hamm/apprenticeship-start-2025-in-hamm-numbers-and-trends-18772430
The appointment of a new Federal Reserve board member by President Trump could significantly influence the future course of US central bank financing, as the new appointee is expected to tilt monetary policy towards a more dovish stance, potentially leading to interest rate cuts. This shift in politics may contradict the current Chairman Jerome Powell’s cautious approach, causing tension between Trump and Powell in the realm of business and general-news.
