Ex-Fed VP Randal Quarles says Trump didn't challenge central bank independence & price stability.

Permanent link to this article: Former Fed Vice Chairman Randal Quarles dismisses concerns about Fed independence under the Trump administration, citing structural safeguards against influence.

President Trump has been critical of high interest rates and inflation, and although he cut rates three times in 2024. Investors expect only one Fed rate cut in 2025, with markets more in line with the central bank's expected policy moves. Former Fed Vice Chairman Randal Quarles dismissed fears that the Federal Reserve's independence would be threatened under President-elect Donald Trump. Speaking at a Bloomberg Television forum, Quarles dispelled misconceptions about the central bank's autonomy. Quarles said there are several structural protections that prevent the president from exerting undue influence over the central bank. What is Fed independence? There is a significant misunderstanding: Fed independence does not mean that the president cannot have an opinion on Fed policy. The Fed is not influenced by the president. It is subject to political pressure, but there is no political influence that would undermine its independence. These statements came amid concerns about President Trump's harsh criticism of Federal Reserve Chairman Jerome Powell last year. Trump also confirmed that he will not reappoint Powell, whose term ends in 2026. During the campaign, Trump often criticized the Federal Reserve's monetary policy, arguing that interest rates remain too high. At a press conference at Mar-a-Lago, Trump blamed the outgoing administration for worsening economic problems. We inherited a tough situation, and they're trying to make it worse. Inflation is still raging and interest rates are too high, Trump said. The U. S. Federal Reserve said it will cut interest rates three times in 2024 and will abandon aggressive rate hikes in 2022 and 2023. The last rate cut was in September and the federal funds rate is in the range of 4.75-5%.

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