The US Federal Reserve System’s mandate from Congress is to maximize employment, stabilize prices and moderate long term interest rates. It’s board of governors are presidential appointees who serve 14 year terms. The method is used to insulate the Reserve from partisan influences.

Often cited is Richard Nixon’s undue pressure on then Fed Chairman Arthur Burns in 1972 to lower interest rates during the run up to elections. The board prematurely lowered the interest rate and the resulting stagflation caused high unemployment and inflation. This lasted into the late 70s when Chairman Paul Volker tightened the monetary policy.

US President for Life hopeful Donald Trump has been publicly attacking the current Fed Chairman Jerome Powell. The Big T wants the Fed to lower the interest rates, presumably to take some pressure off his ill conceived tariff plan. The tariffs will undoubtedly increase prices, inflation, and the Fed will be loathe to lower rates and may even raise them. The Fed tends to raise the interest rate when inflation goes up; slowing the economy and easing consumer prices.

Decentralization of economic policies is a hallmark of US economics. This is to prevent one idiot from screwing the entire system. In contrast is Trump’s declaration of a national emergency to usurp the authority of Congress and give himself power to impose tariffs.

For all their railing against socialism this Republican president has sought to centralize control of economic policy. Venezuela’s economic plight arose from the Hugo Chavez and Nicolas Maduro policies of stringent currency controls and the nationalization of Venezuelan businesses. The state-run PDVSA oil company was purged and replaced with workers who were political supporters that lacked technical expertise. The Venezuelan GDP fell by 80% and inflation as of 2024 was 59.6%.

Trump’s rhetoric about firing Powell caused the market indexes to tank early last week. Trump made a statement on Tuesday saying he would not attempt to fire Powell. The markets began to recover. Wednesday Trump renewed his verbal attacks on the Fed saying they were keeping interest rates too high.

It should be noted the lower interest rates seen since the 2007-08 great recession are not the norm. From 1971 to 2025 average fed rate interest rate was 5.41%. The rule of thumb is for the Fed to shoot for 2% inflation, this keeps rising prices moderate and unemployment low.

It’s time for congress, particularly Republicans, to stand up and stop Trump from illegally imposing tariffs. It’s also time for Trump to show some professionalism and stop publicly criticizing the Fed Chairman to get his way.

• The Federal Reserve Wikipedia
• How Richard Nixon Pressured Arthur Burns American Economic Association
• Stagflation in the 70s Investopedia
• Why Trump keeps attacking the US central bank BBC
• Trump goes after Federal Reserve’s Powell again CNN