Roosevelt Principal Economist Warns: Politicizing the Fed Will Raise Costs and Threaten US Economic Stability

President Donald Trump’s illegal attempt to remove Dr. Lisa Cook from the Federal Reserve Board of Governors is unprecedented—and a direct attack on the Fed’s independence that could lead to higher prices and interest rates, or worse, for all Americans.

“Central banks insulated from politics are a cornerstone of successful economic policy worldwide. The administration’s efforts to politicize interest rates—an authoritarian tactic—will ultimately hurt American families by driving up costs,” said Michael Madowitz, principal economist at the Roosevelt Institute. “That helps explain why Fed independence has helped keep inflation under 3 percent, while, after years of political interference in their central bank, Turkey’s inflation rate is over 33 percent.”

Congress set the Fed’s mandate 50 years ago to ensure maximum employment, stable prices, and moderate interest rates. Leaders in both parties have protected the bank’s independence, because prioritizing independence over short-term policy delivers lower inflation and better serves American families. 

Courts and the American people must reject this illegal power grab before American workers and families pay the price.