President Trump and several of his underlings are wrong in both form and substance in verbally browbeating the Federal Reserve Board to reduce interest rates.
On form, the constant criticism by the administration has the perverse effect of making it more difficult for the Fed to move rates in any direction. Especially when the criticism comes from the president himself, it has the appearance of an implicit threat against the Fed’s independence. A Fed move in the president’s direction will then look like capitulation, while a Fed move in the opposite direction would be interpreted as a political rebuke to the president and a bid to reemphasize its own authority.
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