Former US President Donald Trump, whose preference for lower interest rates and a weaker dollar was evident during his first term, is reportedly planning to override the Federal Reserve’s independence if he returns to the White House in 2025. The result would be a toxic inflationary cocktail.
BERKELEY – If the past three years have taught us anything, it is that low inflation cannot be taken for granted. Even though US inflation remains above the Federal Reserve’s 2% target for price stability, former President Donald Trump’s advisers are discussing a new and dangerous approach to monetary policy. If implemented during a second Trump presidency, it would undo the decades of hard work that allowed the Fed to reduce annualized inflation by nearly four percentage points since 2022, to roughly 3%, at little or no cost to the real economy.
BERKELEY – If the past three years have taught us anything, it is that low inflation cannot be taken for granted. Even though US inflation remains above the Federal Reserve’s 2% target for price stability, former President Donald Trump’s advisers are discussing a new and dangerous approach to monetary policy. If implemented during a second Trump presidency, it would undo the decades of hard work that allowed the Fed to reduce annualized inflation by nearly four percentage points since 2022, to roughly 3%, at little or no cost to the real economy.