Trump Now Owns the Fed
Trump Now Owns the Fed by Jim Rickards – Daily Reckoning
Donald Trump has the opportunity to appoint a higher percentage of the Board of Governors of the Federal Reserve system at one time than any president since Woodrow Wilson.
President Wilson signed the Federal Reserve Act during the creation of the Fed in 1913 when they had a vacant board. At that time, the law said the secretary of the Treasury and the comptroller of the currency were automatically on the Fed’s board of governors. But besides that, President Wilson selected all five of the other participating members.
Now Trump has the opportunity to fill more seats on the Fed’s Board of Governors than any president since then.
That’s pretty amazing when you think about it.
To review, the Federal Reserve’s Board of Governors is made up of seven appointees. That means that they can make a majority decision with four votes. If you’re reading about the Fed, you might also see reference to “regional reserve bank presidents.” These are roles within the Federal Reserve System, but the real power is found on seven-member Board of Governors.
Here’s the remarkable part:
As of last week, four of the seven Fed board seats are now vacant.
In fact, I’m describing a 72-hour span last week as the most momentous three-day period in the entire history of the Federal Reserve (see below for all the details).
Trump will own the Fed. Meaning, whatever the president wants monetary policy to be, he’ll get.
In other words, Donald Trump will be able to shape the Fed’s majority.
But the tricky part is figuring out how he plans to shape it…
During the campaign season, Trump called China and other nations currency manipulators. That signaled he believed the dollar was too strong and wanted it to weaken. But then the North Korean nuclear crisis rose to the fore.