WASHINGTON: Former Federal Reserve officials and foreign central bankers said President Trump’s combative stance toward the U.S. central bank could over time weaken the institution and its role in the global economy.
A string of central bankers, including several gathered in Washington for International Monetary Fund meetings over the weekend, expressed concern about the Fed’s political independence as Mr. Trump again criticized the central bank and seeks to nominate two stalwart political supporters to the organization who also disapprove of its actions.
Though the Fed signaled in recent weeks that it was done for now with interest-rate increases, Mr. Trump wrote Sunday on Twitter that the economy and stock market would be growing faster “if the Fed had done its job properly, which it has not.”
The central bankers said they are concerned the president’s approach could erode nonpartisanship in the Fed’s boardroom over the long run. They cited that longstanding tradition as part of the reason the Fed is a global role model for apolitical policy-making.
“I’m certainly worried about central bank independence in other countries, especially…in the most important jurisdiction in the world,” said European Central Bank President Mario Draghi at a news conference here Saturday, referring to the U.S.
Earlier this month, White House economic adviser Lawrence Kudlow said the administration respects the Fed’s independence. While he as well as the president have called on the Fed to cut interest rates, Mr. Kudlow told reporters: “The Fed is independent. We’re not trying to compromise that independence and never will.”