CNN asks today: “What would a president Trump mean for the Fed?”
The article notes Trump’s statement on February 22 that it’s “so important to audit the Federal Reserve.” This is not the first time Trump has suggested he favors such an audit.
How enthusiastic Trump would be in going after the Fed remains pure speculation, of course, since Trump has not been in a position to vote for or against such a measure, and knowing what a presidential candidate would do in office is impossible. Predicting such things often proves woefully difficult, and predictions are usually wrong. It’s often safe to assume that candidates will lean far more in favor of the status quo than they let on during the campaign.
In his comments, however, Trump has emphasized his (correct) position that the Fed is a highly political institution and that the old saw that an audit would reduce the Fed’s mythical ”independence” is little more than a talking point for the Fed’s supporters. Moreover, Trump has accused the Fed of causing distortions in the economy through its quantitative easing program.
Does Trump understand the economics behind his anti-Fed positions? He probably doesn’t, although that’s pretty standard fare for politicians.
Perhaps the most reliable takeaway from this is how mainstream opposition to the Fed has become. With Trump, Rubio, Cruz, and Sanders all supporting an audit, it’s amazing how much things have changed from a decade ago when questioning the Fed in any manner was seen as political heresy.
With his positioning on this, Trump is likely trying to tap into populist opposition to the Fed’s nearly total lack of oversight and immense power. Back during the middle of Ron Paul’s 2012 presidential campaign, pollsters reported that more than 70 percent of those polled supported an audit of the Fed.
