Trump has a lot to say about the Fed’s interest rate decisions. Economists say it’s best for him to stay quiet.

If re-elected, former President Donald Trump has said he would like to weigh in on the Federal Reserve’s interest rate decisions. However, economists contend that it’s best for presidents to refrain from publicly commenting on monetary policy.

After indicating in August that he would like to have some say in interest rate decisions, Trump again shared his thoughts on the matter in an interview with Bloomberg News Editor-in-Chief John Micklethwait.

“I think I have the right to say, ‘I think you should go up or down a little bit,’” Trump told Micklethwait at the Economic Club of Chicago on Oct. 15. “I don't think I should be allowed to order it, but I think I have the right to put in comments as to whether or not interest rates should go up or down.”

Trump’s comments came after Micklethwait asked him whether he intends to remove Fed Chair Jerome Powell, whose term is up in May 2026. The former president didn’t answer the question, instead touting his own abilities as a businessman and stating, “I think I'm better than (Powell) would be.”

Opinions differ on whether Trump could actually remove Powell as chair before his term is up, though Trump economic adviser Scott Bessent told Barron's that he could potentially nominate a "shadow" Fed chair to take over in 2026, effectively sidelining Powell before his term is up.

“If you're a very good president with good sense, you should be able to at least talk to (the Fed chair),” Trump told Micklethwait.

Donald Kohn, former vice chair of the Fed, acknowledged that “occasionally a chairman goes in to talk to the president,” however, he said keeping those conversations private is better for everyone.

“When the president is public with his or her criticisms, then if the Fed does what the president's advocating, then someone will say, ‘Well, you just gave in to political pressure.’ So, I think it puts the Fed in a difficult position,” said Kohn, who is now the Robert V. Roosa Chair in International Economics at the Brookings Institution and a senior fellow in its economic studies program.

David Wilcox agreed. The economist with the Peterson Institute for International Economics and Bloomberg Economics contended that monetary policy is “a tough, complicated undertaking.”

“What you don't need is an outside factor that takes an already difficult assignment and redoubles the difficulty,” Wilcox added. “And that is what happens when outside pressure from politicians adds a layer of complication to the decision-making environment.”

Kohn also said that “the president is better served by making his views known privately.”

After appointing Powell as Fed chair in 2018, Trump was publicly critical of Powell’s monetary policy while in office, frequently tweeting about his desire for lower interest rates.

Both Wilcox and Kohn cited former Presidents Richard Nixon and Lyndon B. Johnson as examples of past presidents who placed pressure on their Fed chairs. Johnson is even said to have physically shoved William McChesney Martin Jr., who was Fed chair at the time, up against a wall over monetary policy, Wilcox noted.

The norm “that the president and his senior officials surrounding him should refrain from commenting on monetary policy … really took root in the Clinton administration,” according to Wilcox.

Kohn added that it was former President Bill Clinton’s treasury secretary, Robert Rubin, who “convinced (Clinton) that he was better off not making any public comments on monetary policy.”

While they may have expressed their views behind closed doors, former Presidents George W. Bush and Barack Obama also did not publicly comment on monetary policy, Kohn noted.

Vice President Kamala Harris said she would not interfere with the Fed’s decisions if elected president.

Congress created the Fed “with an arm's length relationship to politics,” according to Kohn, given that the Fed Board of Governors has fixed terms, the heads of the 12 Federal Reserve banks are not appointed by the president, and the Fed’s budget is not subject to congressional approval, unlike many other federal agencies.

He said that Congress likely recognized that having influence over the Fed would lead to a constant push for lower interest rates.

Wilcox explained that “monetary policy famously operates with a lag,” so while easing interest rates often leads to low unemployment and stronger gross domestic product growth in the short term, it also can lead to higher inflation in the long term.

“If you're an elected official such as the president, and you have a relatively short time horizon because the election is coming up, it's very much in your interest for the Fed to (ease monetary policy) because you get to enjoy the favorable implications,” Wilcox said.

“The very strong temptation is to get the sugar high in the near term, and then figure, ‘I'll deal with the hangover later on down the road,’” Wilcox added. “That's not a great way to run monetary policy from the longer-term interests of the American public.”

In recent decades, the Fed has attempted to strike the balance of “being one step removed from the day-to-day, to-and-fro of electoral politics, but nonetheless, accountable to the Congress,” Wilcox noted, citing the Fed chair’s congressional testimony as one example of that. The seven members of the Fed Board of Governors, which includes the chair, must also be confirmed by the Senate, after receiving a nomination from the president.

“It's a balancing act, but the idea is to get the Fed out of the political arena, but not completely detached from political accountability,” Wilcox added.

In April, the Wall Street Journal reported that some Trump allies want to cut the Fed’s independence if Trump is re-elected, recommending that Fed regulations be subject to White House review and contending that Trump could remove Powell as chair before his term is up.

Wilcox said that attempting to fire or demote Powell before his term is up “would be a very effective way” of creating a lot of uncertainty, and “uncertainty serves nobody's economic interest.”

If Trump were to win the election, his “main avenue” to influence the Fed would be through appointments, according to Kohn, as Powell’s term is up in 2026 along with that of Fed Gov. Adriana Kugler.

“I think (Trump’s) influence will be mainly felt that way, which is the way Congress intended it, and you do have a congressional Senate guardrail on that,” Kohn said, noting that the Senate blocked Trump’s nomination of Judy Shelton for the Fed Board of Governors in 2020.

Kohn added that “even if (Trump) gets to appoint one or two people, including a new chair, this is a committee. The (Fed) Board is a committee, and the FOMC (Federal Open Market Committee) is a committee.”

The Fed chair is “not a king or queen,” Kohn continued, noting that the chair needs to “bring people along” with them to lead effectively.