According to BlockBeats, on January 10, market analyst Wilcox said that Trump's intervention in the Federal Reserve could lead to higher inflation. Trump has selected Stephen Miran as chairman of the Council of Economic Advisers and Daniel Katz as director of the Treasury Department's Office. The two have jointly developed a plan to comprehensively reform the Federal Reserve system, which will give the president and Congress greater political control over the Federal Reserve.
A key factor in the Fed's current immunity from political interference is that the president can only remove Fed members "for cause" and does not have the power to fire the chairman. Katz and Miran would give the president the power to fire members and the chairman. Second, they would shorten the term of Fed governors from 14 years to eight years and make each term begin on the day the board member is confirmed, allowing many or all terms to expire at the same time. In addition, Congress now authorizes the Fed to set its own budget and fund its operations from the proceeds of the securities it owns. Katz and Miran propose to include this in the appropriations process, with Congress approving the Fed's budget every five years. A large amount of academic literature and American historical experience show that strengthening political control often leads to more severe inflation. (Jin Shi)