Bessent, who supervises the process of selecting the successor to current Fed Chairman Jerome Powell, avoided naming favorites, although the media speculates that potential candidates include: Kevin Hassett, White House chief economic adviser, and current Fed governors Christopher Waller and Michelle Bowman. Also on the list are former Fed official Kevin Warsh and Rick Rieder, a BlackRock manager.
Read also: Interest rate cuts are still to come. The Fed has more to do than the ECB
Trump and pressure on the Fed. The US Treasury Secretary takes the floor
The secretary emphasized that the Fed should now focus on a more limited role in the economy. He noted that this institution had performed a key function for years, especially since the financial crisis, but now it was time for a change. As he said, the central bank should “calm down the situation” and focus on working for the good of citizens.
As CNBC reminds us, the Federal Reserve, considered one of the most important financial institutions in the world, plays a key role in shaping monetary policy by regulating interest rates and financial conditions. Its actions are aimed at protecting the economy against inflation and ensuring maximum employment. Fed decisions also have a significant impact on global financial markets, often shaping the policies of other central banks.
Read also: Donald Trump is again harsh on the head of the Fed. Strong words were spoken
The Fed at the center of the global economy. Experts warn against political pressure
President Trump has repeatedly criticized current Fed Chairman Jerome Powell, whom he called a “moron” and a “big loser.” Trump has pushed to lower interest rates, arguing that such a move could stimulate the economy. However, experts warn that such actions, although they may bring short-term benefits, carry the risk of increasing inflation. The French weekly “L'Express” described it as an “artificial embellishment of the situation” that leads to price increases.
Economist and Nobel Prize winner Paul Krugman, writing on his blog, noted that the Fed's power must be protected from political pressure. He also warned against attempts to abuse it, especially in the context of Donald Trump's administration.
