The Fed's "palace fight" is not a simple numbers game
2025-08-27 21:57:08
On August 28th, the most enduring legacy of Trump's first term was the installation of a Republican-appointed majority on the Supreme Court. Market analyst Gabriel Rubin said that in his second term, he aims to do the same at the Federal Reserve. However, < b > unlike the partisan polarization that has developed over decades in the US Supreme Court, the Fed still tends to value consensus and data dependence . This is reflected not only in the structure of the institution, but also in its internal personnel, including Trump's own appointees. Unless these people obey, the White House will face a fierce battle for control. < b > To be sure, the Trump team now seems to care about loyalty issues . Mr. Milan, recently chosen to fill a vacancy on the Fed board, is far from the mainstream and has called for the central bank to be subordinate to the executive branch and its fiscal priorities. Even if he does, however, majority support for policy decisions will depend not only on the board of governors but also on the rotating votes of local chairpeople. Simply put, the government may win in this long fight. But to seize control quickly, the Fed will need to fight itself.
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