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If you think that President Donald Trump pressuring Jerome Powell, chairman of the Federal Reserve, to lower interest rates is “politics as usual” and has no potential impact on your life, think again.
Trump wants lower interest rates, believing it will help the economy and give Republicans an advantage in midterm elections. But there’s some history to inform us of what can happen when a “strongman” manipulates the central bank.
In Turkey when Recep Tayyip Erdogan seized control of monetary policy and lowered interest rates, inflation eventually spiked to 85%. That translates to a $5 loaf of bread costing $9, and the $3.50 gas for your car becoming $6.30 per gallon.
Inflation in the U.S. right now is less than 3%.
The Founders understood that monetary policy should be kept at “arms length” from political manipulation. The Federal Reserve’s job is to institute policy that is in the best interest of the larger economy and our lives.
Trump would like to upset that balance. If he’s successful, we will all pay here and our economic standing in the world will be undermined. We will likely no longer be seen as the safest place on earth to invest. That matters.
Call your senators and insist that when Powell’s term expires in four months that they confirm a replacement who’s firmly committed to maintaining the independence of the Federal Reserve and unwilling to be manipulated by Trump.
Mary Ann Larson
Bangor