Should the President have a role in determining interest rates?

The federal funds rate, also known as the fed funds target rate, is the interest rate at which commercial banks lend to each other overnight. It's a key tool in U.S. monetary policy that influences other interest rates, such as the prime rate, and indirectly influences longer-term interest rates like mortgages, loans, and savings. In 2024 Donald Trump suggested that the President should have a say in setting interest rates. The proposal would reverse a longstanding custom by which the central bank enjoys political autonomy to fight inflation with often unpopular rate increases. Economi…  sts and scholars have long argued for central bank independence on the theory that politicians prefer lower interest rates, though that can lead to inflation. Fed officials have assiduously guarded their ability to set interest rates without political interference since the 1970s, when high inflation was blamed in part by President Nixon’s success in persuading the Fed chairman, a former economic adviser, to keep rates low before the 1972 election.