Count billionaire Ken Griffin as one of those in the business community questioning President Trump’s hostility toward the Federal Reserve.
Griffin, the founder and CEO of Citadel and a supporter of the president, criticized Trump’s “interventions” in central bank policy in a Wall Street Journal op-ed published Sunday.
“While the U.S. benefits from a large stock of credibility accumulated over decades, it isn’t limitless,” Griffin wrote in the op-ed he co-authored with University of Chicago Business School professor Anil Kashyap. “If eroded, markets will demand far higher interest rates for longer-term debt.”
Trump has pushed Fed Chair Jerome Powell to lower interest rates for months, often mocking Powell for the Fed’s inaction. Powell, whom the president appointed to the job during his first term, has opted against doing so since last September.
That is not the only way Trump has inserted himself into the Fed’s affairs. Last month, the president said he was firing board of governors member Lisa Cook over allegations of mortgage fraud.
Cook, noting that the Fed derives its independence from Congress, has filed suit against Trump over the move. Last week, multiple outlets reported that the Department of Justice has opened a criminal investigation into Cook.
“In a worst-case scenario, if the Fed visibly bows to political pressure and permits inflation to rise unchecked, tens of millions of retired Americans will see their savings diminished,” Griffin and Kashyap added. “Senior voters—tired of bearing the brunt of inflation—could cost the administration dearly in the midterms.”
They also criticized Trump’s firing of former Bureau of Labor Statistics Commissioner Erika McEntarfer. Trump dismissed McEntarfer in August after the bureau’s jobs report showed worse employment data in May and June than it previously reported. As her replacement, Trump appointed E.J. Antoni, a loyalist with a history of provocative comments on social media and cable news, according to WIRED and CNN. Antoni’s appointment is subject to Senate confirmation.
According to the latest CBS News/YouGov poll conducted earlier this month, 68 percent of respondents believe the Fed should be independent of the executive branch — with 32 percent saying the central bank should take directions from Trump. Additionally, 30 percent of respondents said that Trump should replace Fed board of governors members who disagree with him, while 70 percent said the president should not do so.
“Preserving credibility is essential because it benefits all Americans by keeping the costs of borrowing money lower, supporting sustainable growth, and maintaining global confidence in U.S. institutions. Once lost, it is costly and time-consuming to rebuild,” Griffin and Kashyap said.
