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The Federal Reserve

posted Nov 29, 2016, 6:43 PM by Daniel Laurison   [ updated Nov 29, 2016, 7:20 PM ]

The Federal Reserve in general sets interest rates. While the Federal reserve’s monetary policy decisions are supposed to be separate from politics, Trump will get to appoint a replacement for Yellen and three of her colleagues when their terms run out in 2018 → That's an unusually large number of appointees for Trump to nominate. These positions require Senate approval;
after the nomination is approved, the board members work for a set term and do not answer to politicians. Most Presidents usually only get to nominate two Fed leaders so this will result in Trump having an inordinate level of sway over the Fed. Trump has constantly criticized the Federal Reserve, claiming that it created a “big fat ugly bubble.” His criticism suggests that he may try to gain control over the Federal Reserve, directly violating its intended independence; this could make monetary policy political, which is something that would make the economy suffer greatly (could lead to rates being set simply to help a campaign in the short term)