Trump’s war on the Fed will start on Fox & Friends and Twitter


jerome powell trump
Reserve board member Jerome Powell speaks after President Donald
Trump announced him as his nominee for the next chair of the
Federal Reserve in the Rose Garden of the White House in
Washington, Thursday, Nov. 2, 2017

Pablo Martinez Monsivais/AP

  • President Donald Trump has so far mostly respected
    Federal Reserve independence, but that is likely to change if
    economic conditions deteriorate, says Wharton Fed watcher Peter
  • Conti-Brown says Trump’s eventual war on the central
    bank will probably start with a negative report on Fox &
    Friends, followed by an angry tweet. 
  • “When that occurs, expect open warfare to be declared,”
    he warns.

It will start with a negative comment on Fox & Friends. And
then a presidential tweet.

How the Federal Reserve reacts to an attack from President Donald
Trump under the leadership of his own appointee, Jerome Powell,
will be a test of the central bank’s hard-fought, always-fragile
political independence.

That’s how Peter Conti-Brown, assistant professor of legal
studies and business ethics at Trump’s alma matter, the Wharton
School of Business, sees the president challenging the central
bank’s interest rate hikes at the first sign of considerable
market or economic weakness.

“Watch to see how Fox & Friends deals wth the Fed,”
Conti-Brown told a group of reporters at a Wharton-sponsored
seminar. “So far it’s been with indifference.”

The Fed is
set to raise interest rates again
Wednesday as the economy
keeps humming along and unemployment remains at an 18-year low.
Wage growth, however, remains weak, and a key concern for


Conti-Brown sees the risk that Trump’s sharp expansion of the
budget deficit, including large tax cuts aimed at the wealthiest
Americans, at a time of relative economic strength, could force
the Fed to tighten policy in a way that threatens the recovery.
At the same time, the administration’s draconian immigration
policies are looking to reduce the inflow of new workers into the

“This is the textbook instance of an independent Federal Reserve
taking the punch bowl away,” he said. “This is extraordinary
fiscal pressure without some of the ballast that population
growth through migration can provide. It’s to me [the source of]
a coming confrontation between the Trump administration and the
Federal Reserve.”

Conti-Brown, author of “The Power and Independence of the Federal
Reserve,” explained how the scenario might play out:

“Watch the president’s Twitter feed. I’m completely serious and
I’m surprised to hear myself say this. What will have to happen
[is] … number one will be some kind of downturn a market
downturn or a recession; followed by attribution of this downturn
to the Fed; followed by its coverage  on Fox
& Friends. When that occurs, expect open warfare to be