This plan is unlikely to succeed in the near term. The administration’s legal case against Powell is almost certainly specious, and the Fed sets interest rates by the votes of 12 board members, not according to the chair’s sole discretion. Even if the president eventually does get his way, however, and installs enough pliant board members to slash government interest rates, this could have the paradoxical effect of raising the interest rates paid in the real world. If that happened, mortgages would get more expensive, businesses would have a harder time investing, and government financing would become even less sustainable.
Trump seems to have a simple mental model of monetary policy: The Federal Reserve unilaterally sets all of the interest rates across the entire economy.
LET'S PUT THIS ANOTHER WAY......TRUMP'S TACTICS R TERRIBLY ILL THOUGHT OUT.....WHAT A SURPRISE, HIS BUSINESS PLANS CAN NOT TRANSLATE TO THE ENTIRE GLOBE.
Usually the Fed Board is unanimous in their rate decisions. This time there was dissent on the board.
Personally I like higher rates because I am earning interest but mortgage rates are inching down despite the Fed keeping their same position.
Thomas Sowell: There are no solutions, just trade-offs.
