“It’s more overtly political than anything we’ve seen since at least the ’80s, and historically when we’ve had political appointments and interventions in the Fed, there have been unintended consequences that last,” said Julia Coronado, president of MacroPolicy Perspectives and a former Fed staffer. But typically they have also brought deep technical expertise and an inclination to keep political dimensions out of Fed debates. “But you weren’t supposed to bring them into the room when it was time to make a decision, and people didn’t.”That is the tradition that Mr. Trump’s approach endangers. You can read thousands of pages of transcripts of closed-door Fed policy meetings without seeing a reference to the political jockeying that occupies the rest of Washington. Three times in recent decades, a president has reappointed a Fed chairman first named by a president of the opposite party (Ronald Reagan with Paul Volcker, Mr. Clinton with Alan Greenspan and Barack Obama with Ben Bernanke).

Source: New York Times April 06, 2019 09:01 UTC