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The Fed and Trump are set to collide in 2025 - The areas to expect trouble


Published on 2024-12-31 18:20:55 - MSN
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  • The longstanding tensions between President-elect Donald Trump and Federal Reserve Chair Jay Powell are expected to take center stage again in 2025, with economic policies and institutional dynamics setting the stage for potential clashes.

The article from MSN discusses the potential conflicts between former President Donald Trump and the Federal Reserve (Fed) should he return to office in 2025. It highlights several areas where friction could arise:

  • Monetary Policy: Trump has historically criticized the Fed for not lowering interest rates enough, suggesting he might pressure the Fed for more favorable monetary policies to boost economic growth, potentially undermining the Fed's independence.

  • Personnel: Trump could appoint Fed governors who align with his economic views, possibly leading to a shift in the Fed's policy direction. This includes the possibility of replacing key figures like Jerome Powell if his term isn't renewed.

  • Regulation: Trump's administration previously rolled back some financial regulations. A return could see further deregulation, which might conflict with the Fed's regulatory role, especially in areas like bank oversight.

  • Political Pressure: There's an expectation of increased political pressure on the Fed, with Trump potentially using public statements or social media to influence Fed decisions, which could compromise its independence.

  • Economic Strategy: Trump's economic strategies, focusing on tax cuts and deregulation, might not align with the Fed's goals of controlling inflation and ensuring financial stability, leading to public and policy disputes.

    The article underscores the tension between Trump's economic policies and the Fed's mandate to act independently in the interest of economic stability, predicting a challenging dynamic if Trump were to return to the presidency.

    Read the Full MSN Article at:
    [ https://www.msn.com/en-us/politics/government/the-fed-and-trump-are-set-to-collide-in-2025-the-areas-to-expect-trouble/ar-AA1wL3uc ]
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