Typically, Stitch’s Fed’s committee meeting began Tuesday, with more than daytime soap opera dramas, which made more Americans wonder what the need for an all-around central bank is.
Multiple storylines threaten to cover up the announcement announced Wednesday, with interest rates expected to be lowered.
•Mixed economic data has caused a crack in the Fed’s board, which has been scattered in the public for the first time in 40 years.
•Singing around Fed Governor Lisa Cook plans to meet despite the president’s attendance Trump’s With her efforts, Stephen Miran, a White House economic aide who has no board seat, is expected to be there.
•Mr. Trump’s relentless push to raise interest rates has brought the Fed into a corner. This will raise questions about its independence due to the president’s demand for “tax cuts”, but the shaky call will make it look partisan.
• Huge political pressure includes Mr. Trump’s recent insult, known as Fed Chairman Jerome Powell A “numb”, “fool” and “idiot”.
•The dispute between the gentleman trump card Mr. Powell’s refurbishment of the Fed’s headquarters in Washington remains unresolved.
Histrionics have made Americans tired of the Fed. Last year, a Pew Research poll found that the Fed was one of the lowest ratings of 20 government entities. The Fed has a net profit margin of +13, which is only ahead of the CIA, the Department of Education and the IRS, the Centers for Disease Control and Prevention, the Department of Homeland Security and most other agencies.
A YouGov poll released this month shows whether Americans trust the Fed to promote the economy, freeing the United States from a recession or being politically independent. For example, 52% of Americans said they believe the Fed is “a lot or a little bit” to get the country out of the recession, while 48% don’t trust the Fed or are uncertain.
Public suspicion of the central bank has re-raised questions about whether it should be abolished. This year, Republican lawmakers have introduced bills in the House and Senate to eliminate the Federal Reserve, the first measure proposed since 2013.
Some economists believe that an economy without the Federal Reserve would be desirable, but also unrealistic, because since its inception in 1913, U.S. monetary policy has been entangled with central banks. Abolishing central banks will increase economic volatility and may reduce the international status of the dollar because the Federal Reserve manages the U.S. money supply.
“The way the world currently exists is that the Fed is responsible for providing the U.S. dollar to the U.S. dollar, so ending the U.S. dollar means you ending the U.S. dollar,” said Jai Kedia, a researcher at the Cato Institute, a liberalist. “Any plan that needs to end the U.S. dollar needs to be serious and very careful about how to deal with the U.S. dollar.”
Economists say a better path than completely eliminating the Fed is to help central banks continue to move forward or at least reduce changes in political intervention.
Such an adjustment would be to adopt one of the two existing economic rules to formulate monetary policy.
When inflation is above the 2% target, when inflation is above the 2% target, the first rule is called the Taylor rule, which will require the Fed to raise interest rates. The second rule, the nominal GDP rule, requires the Federal Reserve to lower or increase interest rates based on GDP being above or below the target interest rate.
Economists agree that adopting a rule and sticking to it will make the Fed more predictable and the economy more stable. A rule will also make it more difficult for the president to interfere with central bank decisions.
gentlemen. trump card Probably one of the Fed’s most intense critics, but he is not the first president to fight with the Fed’s chairman. Presidents Truman and President Lyndon Johnson also put huge pressure on the central bank to make their political whimsical.
“Making the Fed to comply with the rules can give them a strong safeguard that will allow them to move more on the independent side of the spectrum,” said Ryan Young, senior economist at the School of Competitive Enterprises, adding that Congress will monitor whether the Fed follows the rules.
Some economists advocate the elimination of the Fed’s dual task, namely keeping inflation low while keeping employment at its highest levels, and the economy can maintain: two direct opposition mandates. Lowering interest rates helps the labor market, but also increases inflation as more funds for goods and services can be pursued.
Mr. Yang said: “No matter what they do, there will always be a trade-off.
Although sir trump card The Fed and Mr. released criticism of the Fed. Powellhe did not call for elimination. He recently nominated EJ Antoni, who has long advocated the abolition of the Federal Reserve and is in charge of the Bureau of Labor Statistics.
Rep. Thomas Massie of Kentucky and Sen. Mike Lee of Utah have introduced bills this year calling for the cancellation of the Federal Reserve.
The bill entitled Fed Abolition Act will abolish the board of directors and 12 Federal Reserve banks and repeal the Fed Act that created the system.
“The Fed not only failed to achieve its mission, but has become an economic manipulator, directly contributing directly to the financial turmoil that many Americans face today,” Mr Lee said in a statement. “We need to protect our economic future, end the monetization of federal debt, which can provide unrestricted spending for federal spending and put U.S. currency on a solid stand. We need to end the Fed.”
Sen. Rand Paul, a Republican of Kentucky, introduced legislation that ended the Federal Reserve in 2013.
In all dramas, the U.S. economy shows different signals. Recruitment slowed sharply, inflation cooled, but was still above the target. This has put the Fed in the challenge of whether to lower rates and promote hiring or blocking, and has exacerbated inflation.
gentlemen. Powell It said the Fed will find a middle ground, indicating a quarter-percent reduction. Federal funding rates are now set at 4.25% to 4.5%.
When the Fed lowers interest rates, borrowing becomes cheaper, and consumers pay for credit card debt and car loans lower rates. However, it also reduces interest savings.
