Latest news with #politicalindependence
Yahoo
17-07-2025
- Business
- Yahoo
Republican senators caution Trump against firing Fed chair Jerome Powell
WASHINGTON (AP) — Federal Reserve Chair Jerome Powell is gaining some key backing on Capitol Hill from GOP senators who fear the repercussions if President Donald Trump follows through with threats to try and remove the politically independent central banker. As Trump seemingly waffled back and forth this week on trying to dismiss the Fed chair, some Republicans in Congress began to speak up and warn that such a move would be a mistake. Trump would potentially obliterate the Fed's independence from political influence and inject uncertainty into the foundations of the U.S. economy if he fires Powell. 'If anybody thinks it would be a good idea for the Fed to become another agency in the government subject to the president, they're making a huge mistake,' GOP North Carolina Sen. Thom Tillis said in a floor speech. The measure of support from GOP members of the Senate Committee on Banking, Housing, and Urban Affairs showed how traditional Republicans are carefully navigating a presidency in which Trump often flirts with ideas — like steep tariffs or firing the Fed chair — that threaten to undermine confidence in the U.S. economy. Tillis, who recently decided not to seek reelection after clashing with Trump, later told The Associated Press that the economic fallout from Powell's firing would mostly hurt 'little guys like me that grew up in trailer parks that may have a few thousand dollars in a 401k.' He also pointed out that the underlying complaint that Trump has with the Fed — its reluctance to cut interest rates — is not controlled by Powell alone, but instead a 12-member committee. 'The markets expect an independent, central bank,' said GOP South Dakota Sen. Mike Rounds, who cautioned against firing Powell. 'And if they thought for a minute that he wasn't independent, it would cast a spell over the forecasts and the integrity of the decisions being made by the bank.' Still, plenty of other Republicans think that dismissing Powell is a fine idea. 'The most incompetent, worst Federal Reserve chairman in American history should resign,' said GOP Ohio Sen. Bernie Moreno. Trump said he was also encouraged to fire Powell during a meeting with about a dozen far-right House members Tuesday evening. Do presidents have authority to fire the Fed chair? House Speaker Mike Johnson, R-La., told reporters that he was 'unhappy with the leadership" at the Fed, but added 'I'm honestly not sure whether that executive authority exists' to fire Powell. House Financial Services Committee chair French Hill has underscored that presidents don't have the authority to fire the Fed chair, yet has also been sympathetic to Trump's complaints about Powell's leadership. He and other Republicans have also noted that Powell's term as chair is ending next year anyway, and Trump will have an opportunity to name a new chair then. When Congress started the Federal Reserve over 100 years ago, it insulated it from political pressure by stipulating that its governors and chair could only be fired 'for cause' — a higher bar than most political appointees. However, the Trump administration has maneuvered to meet that standard by accusing Powell of mishandling a $2.5 billion renovation project at the Fed's headquarters. 'When his initial attempts to bully Powell failed, Trump and Republicans in Congress suddenly decided to look into how much the Fed is spending on building renovations,' Sen. Elizabeth Warren, the top Democrat on the Senate Banking Committee, said in a speech Wednesday. 'Independence does not mean impunity and I have long pushed for more transparency and accountability at the Fed. But give me a break.' After Powell sent Congress a letter detailing parts of the renovation project, Sen. Tim Scott, the Senate Banking Committee chair, released a short statement saying Scott 'has continued to call for increased transparency and accountability at the Federal Reserve, and this letter is consistent with improving the communication and transparency he is seeking.' Avoiding a protracted legal battle Regardless, it would be legally dubious to fire Powell over the renovation. "That would be litigated and I don't see a reason, for cause or otherwise, to remove him,' Sen. John Kennedy, a Republican member of the Senate committee that oversees the Fed, told reporters this week. He added that he understood the president's 'frustration' with the Fed's reluctance to lower interest rates as it tries to tamp down inflation, saying, 'I get that, but I think it's very important the Federal Reserve remains independent.' Even those Republicans who argued that the president has grounds to fire Powell and piled criticism on the central banker conceded that it would still be a painful step. 'That's a decision the president will make, and he's being very deliberate about it," said Moreno, the Ohio senator who called for Powell's resignation. 'But I don't think we should put the country through any of that." Stephen Groves, The Associated Press Sign in to access your portfolio
Washington Post
15-07-2025
- Business
- Washington Post
Trump's attacks on the Fed are worse than you think
The Federal Reserve's political independence — the sense that the world's most powerful central bank makes decisions based on economic conditions, not short-term political considerations — is a critical national asset. President Donald Trump is eroding it in ways that could be bad for the country and his own agenda. For months, Trump has demanded that the Fed lower interest rates, with no success. Now, the administration's attacks on Chair Jerome H. Powell are escalating: White House budget adviser Russell Vought blasted Powell on social media for 'grossly' mismanaging the Fed, and Federal Housing Finance Agency Director William J. Pulte accused him of lying under oath during recent congressional testimony. And on Monday, Trump called Powell 'a knucklehead' and a 'stupid guy' who is costing the United States a significant amount of money. If Trump fires Powell — an unlikely outcome — immediate disaster would result: Investors would lose confidence in the Fed's ability to make politically tough but economically necessary decisions. Bond markets would go haywire as investors abandoned U.S. assets, and the dollar would plummet. But Trump risks politicizing the Fed even if he lets Powell stay through the end of his term as chair in May. He has signaled that Powell's successor must be willing to cut rates to get the job, which means that markets will perceive any nominee — whether Scott Bessent, Kevin Warsh, Kevin Hassett or someone else — as pre-politicized. That would bring bad economic consequences, even in the best-case scenario. Suppose the new chair, unwilling to totally compromise his legacy, refuses to sharply cut rates like Trump wants. Instead, he delivers just a quarter-point cut — a concession to political pressure, perhaps, but a small one. The market reaction would still be swift. Investors would immediately assume that the cut was a product of political pressure, not economic data, and start to worry that the Fed would not be tough enough to fight inflation if it ticked up again. Investors might anticipate a higher steady state of inflation — at 3 or 4 percent, for example, rather than the Fed's 2 percent target. Those beliefs — known as inflation 'expectations' — can strongly influence actual prices. If people believe prices will increase, they will choose to spend rather than save, so their money doesn't lose value sitting in the bank. Businesses, budgeting for the future, might preemptively raise prices or agree to higher wage contracts. More spending puts upward pressure on prices, which in turn increases inflation expectations, initiating a dangerous cycle. And the Fed — now more responsive to Trump's pressure — might be unwilling to raise interest rates aggressively enough to stop it. Plus, even if Trump gets exactly what he wants — a Fed chair willing to vote for rate cuts on command — a short-term economic boost might not materialize. A more dogmatic Fed chair is more likely to lose the confidence of the other 11 members on the Federal Open Market Committee, the group that sets interest rates and guides monetary policy. To protect the Fed's credibility, the rest of the committee might vote against the chair and decide to keep rates high even when conditions could reasonably warrant a cut. As a result, the Fed might actually cut rates less often to avoid further tarnishing its reputation. Rate cuts also help growth only if borrowing increases. But household consumption and business investment aren't affected by the interest rate that the Fed sets directly. Rather, most big loans — mortgages, auto loans and so on — are tied to longer-term Treasury yields. Normally, when the Fed cuts its short-term policy rate, those longer-term rates fall, too. (Rather than park funds at the Fed to earn a now-lower rate, banks would rather lend to their customers. That reduces the cost of credit, pushing rates down.) But if investors believe the Fed is lowering rates for political reasons, they might become more concerned about inflation and demand higher yields on long-term bonds to make up for the chance of future inflation eating into their returns. That's what happened in Turkey amid its inflation crisis. From August 2021 to January 2022, the central bank of Turkey cut its benchmark interest rate from 19 percent to 14 percent. Over the same period, yields on 10-year Turkish bonds increased from 17 percent to 23 percent. Investors, so concerned about Turkey's irresponsible monetary policy, demanded higher compensation for holding the government's debt — undermining the central bank's attempts to lower borrowing costs. Politicians aren't good at monetary policy. They face a powerful temptation to goose the economy in the short term, even at the cost of future growth. (Just look at how Trump's budget bill will explode the national debt.) That's why independent central banks exist: to take the long view and make decisions based on economic fundamentals rather than the political calendar. Trump threatens to destroy that independence. If the next chair pledges allegiance to Trump's economic preferences, future presidents might demand the same loyalty of their appointees, too. A permanent loss of Federal Reserve credibility would not just be a problem for rich investors; American families would feel the pain, too.
CBS News
07-07-2025
- Politics
- CBS News
Baltimore County eyes Independent Inspector General Board after city watchdog's warning
What began as a warning from Baltimore City's top watchdog back in May is now inching toward reality in Baltimore County. In a story first reported by WJZ, Baltimore City Inspector General Isabel Mercedes Cumming cautioned county leaders that their Inspector General's independence could be compromised without structural protections, just as city voters moved to safeguard hers in 2022. An appointment board proposed Baltimore County Councilman Izzy Patoka is proposing to establish an inspector general appointment board. Patoka's proposal would create a seven-member independent board responsible for appointing and reappointing the county's Inspector General, insulating the process from political influence. The effort comes amid controversy surrounding current Inspector General Kelly Madigan, who says she was blindsided when Interim County Executive Kathy Klausmeier required her to reapply for the position she helped create five years ago. "Thirty-four public reports, five annual reports... made over a hundred recommendations," Madigan said when she spoke with WJZ in early May, underscoring her office's accomplishments. Patoka stressed that this would not be an advisory or oversight group. "Let me repeat, it is not an advisory board," he said. "It is not an oversight board. It is an appointment board." Risking undermining the Inspector General In May, WJZ spoke with Cumming in Baltimore City, where an 87% majority of voters approved a charter amendment to create an independent advisory board free of elected officials. She warned then that Baltimore County risked undermining its own Inspector General without similar action. "Saying you have an Inspector General that's independent but keeping her under the watchdog of an elected official—that's not true independence," Cumming said. What's the purpose of the appointment board? Cumming is publicly supporting Patoka's proposal. "I strongly support this bill," she said Monday. "As the Inspector General of Baltimore City, I worked with the City Council to pass a similar amendment. I have complete confidence Baltimore County voters will stand with their Inspector General as ours did." Under Patoka's proposal, the appointment board would consist of: A County Executive appointee A County Council appointee A retired judge selected by the Director of the Ethics Commission A member of the Association of Certified Fraud Examiners A member of the Maryland Association of Certified Public Accountants A faculty member from a Baltimore County college or university A faculty member from a Historically Black College or University in the Baltimore region Madigan is being interviewed for reappointment Madigan is undergoing a formal interview process to determine whether she will be reappointed. Patoka says he hopes her name is forwarded to the council. "I'm hoping we can be beyond this point and move on with the other business of Baltimore County government," Patoka said. If the charter amendment gains five votes on the County Council, it would go before voters in the 2026 election.
RNZ News
03-07-2025
- Politics
- RNZ News
David Seymour criticises Rawiri Waititi for 'insane views' about African leader Ibrahim Traoré
Rawiri Waititi has praised an African leader who has become popular as a symbol of resistance to the West. Photo: RNZ / Mark Papalii Deputy Prime Minister David Seymour has labelled Te Pāti Māori a threat to democracy after its co-leader Rawiri Waititi declared a West African military ruler to be his "modern day hero". Burkina Faso's leader Ibrahim Traoré has grown in popularity across Africa and beyond, since seizing power in a 2022 coup, with many praising him as a symbol of resistance to the West. Earlier this year, Waititi shared a video of Traoré on Instagram, along with a comment labelling the president his "modern day hero!". "Tino Rangatira is not only a domestic commitment, it is an international determination. Our fight for political, economic, social and cultural independence and liberation is not a dream, it's a decision!" Waititi wrote. The post provoked the ire of the ACT Party's leader, who cited it as evidence of Te Pāti Māori's "insane views". "Rawiri Waititi once said he's not a fan of democracy. We need to take him seriously," a spokesperson for Seymour said in a statement. "His hero is a Marxist dictator who has delayed elections and banned homosexuality... [Te Pāti Māori is] not in Parliament to uphold democracy, but wreck it." Te Pāti Māori declined RNZ's request for a response: "We will not be commenting on this". ACT leader and Deputy Prime Minister David Seymour has labelled Rawiri Waititi a threat to democracy. Photo: RNZ / Mark Papalii Ahead of the 2023 election, Waititi told Newshub he was "not a fan of democracy", describing it as "a tyranny of the majority". Traoré took power in Burkina Faso in September 2022, ousting a fellow military officer amid growing frustration at ongoing jihadist violence. Since then, he has styled himself as a pan-African revolutionary and pledged to restore security and national sovereignty. A BBC profile in May said Traoré had built the "persona of a pan-Africanist leader determined to free his nation from what he regards as the clutches of Western imperialism and neo-colonialism". While Traoré commands strong support among some youth and rural communities, rights groups have raised alarm over increasing authoritarianism, human rights violations and media suppression. Earlier this year, Human Rights Watch accused the Burkina Faso government forces and allied militia of massacring more than 130 civilians in March. Under his leadership, the country has shifted away from former colonial power France and drawn closer to Russia. A researcher at South Africa's Institute for Security Studies, Enoch Randy Aikins, told the BBC that Traoré's radical reforms had buoyed his popularity. "He is now arguably Africa's most popular, if not favourite, president," Aikins said. Traoré initially promised to hold elections in 2024 but subsequently delayed them until at least 2029. In July 2024, the military junta announced a ban on homosexual acts, but it does not yet appear to have been enacted into law. Sign up for Ngā Pitopito Kōrero , a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
RNZ News
03-07-2025
- Politics
- RNZ News
David Seymour criticises Rawiri Waititi for 'insane views' about African leader
Rawiri Waititi has praised an African leader who has become popular as a symbol of resistance to the West. Photo: RNZ / Mark Papalii Deputy Prime Minister David Seymour has labelled Te Pāti Māori a threat to democracy after its co-leader Rawiri Waititi declared a West African military ruler to be his "modern day hero". Burkina Faso's leader Ibrahim Traoré has grown in popularity across Africa and beyond, since seizing power in a 2022 coup, with many praising him as a symbol of resistance to the West. Earlier this year, Waititi shared a video of Traoré on Instagram, along with a comment labelling the president his "modern day hero!". "Tino Rangatira is not only a domestic commitment, it is an international determination. Our fight for political, economic, social and cultural independence and liberation is not a dream, it's a decision!" Waititi wrote. The post provoked the ire of the ACT Party's leader, who cited it as evidence of Te Pāti Māori's "insane views". "Rawiri Waititi once said he's not a fan of democracy. We need to take him seriously," a spokesperson for Seymour said in a statement. "His hero is a Marxist dictator who has delayed elections and banned homosexuality... [Te Pāti Māori is] not in Parliament to uphold democracy, but wreck it." Te Pāti Māori declined RNZ's request for a response: "We will not be commenting on this". ACT leader and Deputy Prime Minister David Seymour has labelled Rawiri Waititi a threat to democracy. Photo: RNZ / Mark Papalii Ahead of the 2023 election, Waititi told Newshub he was "not a fan of democracy", describing it as "a tyranny of the majority". Traoré took power in Burkina Faso in September 2022, ousting a fellow military officer amid growing frustration at ongoing jihadist violence. Since then, he has styled himself as a pan-African revolutionary and pledged to restore security and national sovereignty. A BBC profile in May said Traoré had built the "persona of a pan-Africanist leader determined to free his nation from what he regards as the clutches of Western imperialism and neo-colonialism". While Traoré commands strong support among some youth and rural communities, rights groups have raised alarm over increasing authoritarianism, human rights violations and media suppression. Under his leadership, the country has shifted away from former colonial power France and drawn closer to Russia. A researcher at South Africa's Institute for Security Studies, Enoch Randy Aikins, told the BBC that Traoré's radical reforms had buoyed his popularity. "He is now arguably Africa's most popular, if not favourite, president," Aikins said. Traoré initially promised to hold elections in 2024 but subsequently delayed them until at least 2029. In July 2024, the military junta announced a ban on homosexual acts, but it does not yet appear to have been enacted into law. Sign up for Ngā Pitopito Kōrero , a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
