Two days after Donald Trump became the first American since Grover Cleveland to win non-consecutive presidential elections, the Federal Reserve announced a quarter percent cut in interest rates. Following the announcement, Fed Chairman Jerome Powell held a press conference in which he said he would not comply with any presidential request to resign before the end of his term in May 2026.

Powell claimed the president did not have the legal authority to fire the Fed chairman. So if President Trump tells Chairman Powell “you’re fired,” Powell could file a lawsuit to ask a court to review Trump’s action.

President Trump and Chairman Powell disagree over President Trump’s desire to require the Federal Reserve to consult with the President before changing interest rates or taking other significant actions. Powell will likely do everything he can to convince Congress to reject any legislation giving the president any formal role in setting monetary policy. After all, Chairman Powell is so protective of the Fed’s autonomy that he opposes auditing the Fed on the grounds that it could threaten the independence of the Fed, even though nothing in the legislation on the The Fed audit does not give the president or Congress any new authority over the Fed. conduct of monetary policy.

Requiring the Fed to consult with the president about monetary policy would likely increase price inflation and dollar devaluation. Politicians generally like low interest rates because they associate low rates with economic growth. Politicians also want the Fed to keep rates low so the federal government can continue accumulating huge debts. Without a central bank ready, willing and able to monetize the federal debt, the welfare war state would not exist.

Despite the assertions of Chairman Powell and other central bank defenders, the Fed has never been immune to political pressure. Presidents were trying to influence the Federal Reserve long before Donald Trump started posting “mean tweets” about Jerome Powell. Requiring the Fed to consult with the president would at least make the president’s efforts to influence monetary policy open and transparent.

President Trump and other Fed critics, such as Massachusetts Sen. Elizabeth Warren, believe they are better able than the Fed to determine the “correct” interest rate. This ignores the fact that interest rates are the price of money and, like all prices, are shaped by a variety of constantly changing factors. When the Fed manipulates interest rates, it distorts the signals sent to investors. The result is an economic cycle of boom and bust. The fiat system is also responsible for increasing income inequality and the decline in the purchasing power of the dollar, which has lowered the standard of living for most Americans.

President Trump should work to eliminate the need for the Fed to keep interest rates low. He can do this by fighting for massive spending cuts, starting with the military-industrial complex. He is also expected to push Congress to pass the Audit the Fed bill. Additionally, President Trump should support the legalization of all competing currencies. The next tax bill is expected to include a provision exempting precious metals and cryptocurrencies from capital gains tax. The key to making America great again is to make money free again.

Originally published by the Ron Paul Institute.