In theory, the Chairman of the Federal Reserve (who controls interest rates) is supposed to be insulated from political pressures: one explanation for the root of the "stagflation" malaise in the US economy during the 1970's was that Richard Nixon's chairman (Arthur Burns, who had been a direct advisor to RMN) kept interest rates too low for the economy at the time in order to help Nixon get reelected in 1972 (and then beyond, to make Nixon and then Ford more popular). Under this explanation- common among those who support central bank independence- it took Paul Volecker (a Carer appointee) to run interest rates very high for a long time (the so-called Volecker Recession of the early 1980's) to make up for the failure of Burns. This is where the tradition of Fed Chairman independence comes from. (1)
Donald Trump, as a real estate guy, instinctively understands the power of lower interest rates and definitely lobbied hard for Jay Powell (whom he appointed) to lower interest rates in his first term. So if he gets elected again I expect we will see that sort of pressure applied again, the question is whether the Chairman would continue to chart their own course or not.
1: The truth of this story is, as always with economics, impossibly hard to measure. There was a strong movement from the 1960's into the 1990's to try and create independent central banks- this is where the Nobel Memorial Prize in Economics came from, among other things- but the evidence is such that the physicist in me recoils at the idea that this has been proven.
Donald Trump, as a real estate guy, instinctively understands the power of lower interest rates and definitely lobbied hard for Jay Powell (whom he appointed) to lower interest rates in his first term. So if he gets elected again I expect we will see that sort of pressure applied again, the question is whether the Chairman would continue to chart their own course or not.
1: The truth of this story is, as always with economics, impossibly hard to measure. There was a strong movement from the 1960's into the 1990's to try and create independent central banks- this is where the Nobel Memorial Prize in Economics came from, among other things- but the evidence is such that the physicist in me recoils at the idea that this has been proven.