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In the previous year, two scholars suggested eliminating the “revolving door” linking the White House and the Federal Reserve. They argued that such a move would be “critical” to curbing motivations for officials to operate in immediate political gains.

Less than a year afterward, both authors – Dan Katz and Stephen Miran – entered the Trump administration in high-level positions. Recently, Miran, now chair of the US Council of Economic Advisers, assumed a position as a governor at the Fed.

At his confirmation hearing, he pledged to protect the central bank’s autonomy, but clarified he would remain from his White House role, only taking a leave of absence.

Just hours prior to the latest central bank gathering, Miran was sworn in to the leadership panel – while former President Donald Trump continued urging for the dismissal of a different board official.

Presidential Influence and Interest Reductions

The president has consistently expressed his desire for the Fed to reduce borrowing costs more aggressively. Last month, he remarked, “I will soon have a majority very shortly” on the rate-setting committee.

When asked from reporters about the central bank’s independence, he replied, “It ought to be independent. But I think they should listen to knowledgeable individuals, like me.”

This open pressure defies traditional norms where presidents usually refrain from commenting on interest rate decisions.

A Delicate Equilibrium

Recently, the Fed at last lowered interest levels by a quarter point, marking the first decrease since last winter. Officials indicated that further reductions are likely.

However, a single governor – Stephen Miran – disagreed, advocating a more significant 50 basis point reduction.

Several additional officials voiced concern about price increases, which has stayed stubbornly high in recent months. These officials emphasized the need to balance economic stimulation with controlling inflation.

“Shifts in federal regulations continue to evolve, and their effects on the market are not yet clear,” remarked Fed Chair Jerome Powell.

Organizational Independence Under Threat

In spite of the chairman’s confidence that rate decisions are guided by data and free from political influence, external demands continue.

Trump is said to be pushing for the removal of a Biden-appointed governor and aims to name a new chair when Powell’s term ends in the coming months.

At present, though, Powell insists that deliberations within the central bank are focused on convincing reasoning backed by market statistics.

“It is ingrained of the organization,” he said. “That’s not going to change.”

Yet, many analysts question whether the Fed’s independence can withstand such overt executive interference.

While Trump himself put it: “They have to make their independent choice. Yet they should pay attention.”