Former Fed Leaders Plea for Central Bank’s Political Independence Paul Volcker, Alan Greenspan, Ben Bernanke and Janet Yellen say Fed should be free from short-term political pressures Janet Yellen in 2017. The op-ed piece comes after regular attacks by President Trump on the central bank. Photo: Andrew Harrer/Bloomberg News By Paul Kiernan Aug. 5, 2019 8:26 pm ET WASHINGTON—The former heads of the Federal Reserve made their case Monday for the central bank to remain independent and free from short-term political pressures, an implicit rebuttal to President Trump’s repeated criticism of the institution. All four former still-living Fed chairs—Paul Volcker, Alan Greenspan, Ben Bernanke and Janet Yellen—cosigned an op-ed in The Wall Street Journal on Monday underlining their belief that the central bank and its leader should be allowed to serve without political pressures or “the threat of removal or demotion... for political reasons.” “It is critical to preserve the Federal Reserve’s ability to make decisions based on the best interests of the nation, not the interests of a small group of politicians,” the former central bankers wrote. The piece follows more than a year of regular attacks by Mr. Trump on the central bank, which he accuses of undermining his economic agenda by keeping interest rates higher than he would like. The White House didn’t immediately respond to a request for comment on the op-ed. Current Fed Chairman Jerome Powell has repeatedly said the central bank doesn’t take presidential criticism or other political considerations into account when making policy decisions. The Fed’s formal mandate requires it to pursue maximum employment and stable prices. Fed Chairman Jerome Powell has said the central bank doesn’t take presidential criticism into account when making policy decisions. Photo: Manuel Balce Ceneta/Associated Press But in recent months, Mr. Trump has explored the possibility of attempting to fire or demote Mr. Powell. Legal analysts question whether he has the authority to do so, and Mr. Powell has said he wouldn’t step down if the president asked. In addition to issuing frequent Twitter attacks, Mr. Trump has also formed a habit of making brief, monthly phone calls to Mr. Powell after the two shared a dinner at the White House in February. With two remaining vacancies to fill on the board of governors, some market participants have begun wondering who—in the event Mr. Trump is re-elected—might replace Mr. Powell once his term as Fed chairman ends in 2022. Nominating governors or a chair who share his views is one way the president could increase his sway over the central-bank policy, scholars say. “When the current chair’s four-year term ends, the president will have the opportunity to reappoint him or choose someone new,” Messrs. Volcker, Greenspan and Bernanke and Ms. Yellen wrote. “We hope that when that decision is made, the choice will be based on the prospective nominee’s competence and integrity, not on political allegiance or activism.” Write to Paul Kiernan at paul.kiernan@wsj.com
Yeah, it's not like any of them did things (including "emergency meeting rate cuts," 50-basis point cuts, etc.) that turned around the markets and helped Clinton/Bush/Obama's approval ratings. Political theatre at its finest (or worse).
A bunch of establishment folks. The central bank is a private entity owned by Rothschilds and Rockefellers. I believe what Trump has probably done is threatened those Fed shareholders that he would shut it down if they don't listen to him. The Fed should be owned by the government, not privately owned. The Fed's independence is just an excuse. Because of the Fed's power, they technically control the government. They could increase or decrease the rates as they please and make the current administration look bad.