The Fed has been a thorn in Trump’s side. It’s as if they don’t want to unshackle the American economy.
Now a Trump insider tipped off the media to the President’s plan for the Federal Reserve.
Reforming Federal Reserve Leadership
President Donald Trump’s ongoing push to reshape the Federal Reserve has intensified, driven by his vision for a more responsive central bank, as discussed by former economic adviser Larry Kudlow on Pod Force One with The Post’s Miranda Devine. Reflecting on Trump’s frustration from his first term, Kudlow noted, “Trump was furious at Powell in the first term for jacking up [interest] rates for no particular reason.”
Trump’s strategy aims to realign the Fed’s priorities with the economic needs of the American people, leveraging his authority as the elected chief executive to steer monetary policy toward growth-oriented outcomes.
With Fed Chair Jerome Powell’s term set to end in May 2026, Kudlow predicted a significant shift, stating, “President Trump’s going to take the Fed over, as he should,” framing it as a necessary step to enhance accountability.
Addressing Fed Policy and Credibility
Kudlow highlighted concerns about the Fed’s credibility under Powell, citing economist Mohamed El-Erian’s call for Powell’s resignation.
“And he said, with good logic he said, basically, ‘Look, Powell’s had such a zigzag approach at the Fed that the longer he stays, the worse the independence argument gets, and the worse the Fed’s credibility gets,’” Kudlow recalled.
Trump’s brief consideration of firing Powell, later softened with, “That is a big move, and I just don’t think it’s necessary. And I believe that he’s going to do the right thing,” reflects a pragmatic approach to achieving reform without unnecessary disruption.
Additionally, Kudlow criticized the Fed’s establishment of “DEI offices” within its regional network, suggesting that such initiatives distract from its core mission.
Trump’s push for reform, including scrutiny of the Fed’s $2.5 billion headquarters renovation, aligns with his broader goal of streamlining operations and focusing on policies that directly benefit American workers and businesses, reinforcing his commitment to economic efficiency.
Proposing a New Direction for the Fed
Kudlow advocated for a comprehensive overhaul of the Fed, proposing trusted figures like Kevin Hassett and Kevin Warsh to replace Powell.
“You need a top to bottom review of the Fed — everything — monetary policy, regulatory policy, personnel policy, staffing policy, economic models policy. There has to be a thorough going [over], and you need somebody from the outside and then bring in new people,” he said.
This vision supports Trump’s plan to appoint leaders who align with his economic agenda, prioritizing lower interest rates and regulatory reforms to boost growth.
Kudlow’s assertion that “Whether you’re an activist judge, or the chairman of the Federal Reserve, or the chairman or a member of the Federal Trade Commission, you shouldn’t block the president” reinforces the idea that the Fed should reflect the will of the elected commander-in-chief.
