Analyst: Trumps political intervention in the Federal Reserve may become a reality

CoinRank News: Market analyst Wilcox said that Trumps intervention in the Federal Reserve could lead to higher inflation. This could become a reality according to a proposal jointly put forward by two senior positions selected by Trump in his administration. Trump has selected Stephen Miran as chairman of the Council of Economic Advisers and Daniel Katz as chief of staff of the Treasury Department. Together, they have developed a plan to comprehensively reform the Federal Reserve system, which will give the president and Congress greater political control over the Federal Reserve. A key factor in the Federal Reserves current immunity from political interference is that the president can only remove Federal Reserve members from their posts for cause and has no right to dismiss the chairman. Katz and Miran will give the president the power to dismiss members and the chairman. Secondly, they will shorten the term of the Federal Reserve board from 14 years to 8 years and make each term start from the date the committee member is confirmed, so that many or all terms can expire at the same time. In addition, Congress now authorizes the Federal Reserve to set its own budget and fund its operations from the proceeds of the securities it owns. Katz and Miran suggest that it be included in the appropriations process, with Congress approving the Federal Reserves budget every five years. A large amount of academic literature and American historical experience show that strengthening political control often leads to more serious inflation. (Jin Shi)