By — Paul Solman Paul Solman Leave your feedback Share Copy URL https://www.pbs.org/newshour/economy/how-much-weight-does-the-us-pr Email Facebook Twitter LinkedIn Pinterest Tumblr Share on Facebook Share on Twitter How much weight does the U.S. president have on interest rate changes? Economy Mar 21, 2008 11:07 AM EDT Question/Comment: How much weight does the U.S. president have on interest rate changes? The news talks about the Federal Reserve, but it seems it was Bush’s idea to bring them down low, so everyone can own a home. I know there are other things to take in consideration, like tax incentives, spending, etc. However, if all these factors were constant, then how much does the president influence the rate? It seems with the election coming up, the president does not want a recession, which used to be a natural part of ebb and flow. Paul Solman: There’s a long history of suspecting that the Fed is in cahoots with administration in power, especially when the Fed chairman is nearing reappointment, as Ben Bernanke now is. But the Fed is about as close to an independent central bank as a government bank can get. That’s why the even more common complaint has been that it’s undemocratic: the Fed chairman and governors are elected. It’s also why the Fed chairman is commonly referred to as having the second most powerful job in the U.S. The president does not want a recession. But neither does Bernanke. It’s his job to avoid one. We're not going anywhere. Stand up for truly independent, trusted news that you can count on! Donate now By — Paul Solman Paul Solman Paul Solman has been a correspondent for the PBS News Hour since 1985, mainly covering business and economics. @paulsolman
Question/Comment: How much weight does the U.S. president have on interest rate changes? The news talks about the Federal Reserve, but it seems it was Bush’s idea to bring them down low, so everyone can own a home. I know there are other things to take in consideration, like tax incentives, spending, etc. However, if all these factors were constant, then how much does the president influence the rate? It seems with the election coming up, the president does not want a recession, which used to be a natural part of ebb and flow. Paul Solman: There’s a long history of suspecting that the Fed is in cahoots with administration in power, especially when the Fed chairman is nearing reappointment, as Ben Bernanke now is. But the Fed is about as close to an independent central bank as a government bank can get. That’s why the even more common complaint has been that it’s undemocratic: the Fed chairman and governors are elected. It’s also why the Fed chairman is commonly referred to as having the second most powerful job in the U.S. The president does not want a recession. But neither does Bernanke. It’s his job to avoid one. We're not going anywhere. Stand up for truly independent, trusted news that you can count on! Donate now