AP Photo/Alex Brandon
- Allies of former president Trump are drafting plans to chip away at the independence of the Fed, The Wall Street Journal reported.
- Trump has not publicly acknowledged the plan, but sources said it has his blessing.
- The plan also suggests Trump could fire Jerome Powell before his term ends in 2026.
Donald Trump's allies have secretly mapped out a plan to give the Republican candidate more control over the Federal Reserve if he wins a second term, a move that would chip away at the long-standing independence of the US central bank, The Wall Street Journal reported Thursday.
A group of the former president's associates and supporters have been busy in recent months drafting a 10-page manifesto plotting policy shifts and suggesting that the presidential candidate should have a say in the interest-rate setting process, a suggestion that even caught some of Trump's former economic advisors off guard, sources told the Journal.
Sources said the group also thinks the Treasury Department should have more power to keep an eye on the Fed, and if Donald Trump takes office again, he would be able to fire Jerome Powell as Fed chair even before Powell's term is up in 2026.
The former president handpicked Powell to lead the US central bank in 2017, but he has since publicly lambasted the central bank chief. In February, Trump slammed Powell and accused him of trying to help President Joe Biden win reelection in November by turning dovish on monetary policy.
Though Trump hasn't acknowledged the plan publicly, sources told the Journal they reckon the plan has his blessing, with his senior advisors clarifying that the plan shouldn't be treated as official unless Trump says so directly.
The Journal said Trump has expressed his desire for easing monetary policy and his frustration for not being able to impact it while he was in office. He also led casual discussions with his advisors and associates about potential candidates to take over as the head of the central bank.
The idea of making the Fed less independent has faced backlash, even from former Trump administration officials.
Republican Senator Kevin Cramer told the Journal that maintaining the central bank's independence in setting policy is "critical to doing it in an unbiased, nonpolitical way," adding that he'd oppose any attempts to hurt the Fed's autonomy.