The Federal Reserve played a crucial role in preventing a recession in 2024 by carefully adjusting interest rates to reduce inflation without significantly slowing economic growth. However, President Donald Trump remains dissatisfied with Fed Chair Jerome Powell’s performance. Following the Fed’s decision not to lower interest rates, Trump labeled Powell a “FOOL, who doesn’t have a clue” on his social media platform, Truth Social. Trump advocates for lower interest rates, arguing that high rates are no longer necessary as inflation has dropped below 3 percent, though tariffs pose a risk of inflation resurgence. Powell, however, is empowered to disregard Trump’s opinions due to the Fed’s independence from political influence. Historically, presidents have largely refrained from publicly criticizing the Fed to maintain its autonomy. For instance, former President Joe Biden emphasized the Fed’s independence during periods of high inflation post-Covid-19. Trump’s repeated attacks on Powell and the Fed threaten this independence, potentially increasing economic uncertainty exacerbated by his tariffs. Independent central banks typically perform better than those influenced by political agendas, as they prioritize long-term economic health over short-term gains. Countries like Venezuela and Turkey have faced severe economic crises after their central banks succumbed to political pressures. The US must uphold the Fed’s independence to ensure economic stability and avoid similar fates. — new from vox.com