The Federal Reserve, led by Chairman Jerome Powell, is expected to play a significant role in the upcoming 2024 election. According to Peter Schiff, a prominent conservative commentator, the Fed will make efforts to support President Joe Biden or any other Democratic candidate in their bid for re-election.
Schiff argues that the President’s authority to nominate the Federal Reserve chair makes this position crucial in shaping the Fed’s decisions. As a result, Powell and future chairs are incentivized to align their policies with the President in order to secure their position and maintain influence within the administration.
This isn’t necessarily a left-wing bias, Schiff explains. The Fed chairman’s alignment with the President transcends party lines. What matters is who is in the White House at the time. The Fed chairman always wants to play ball with whichever administration is in power.
The relationship between the Fed and the President is often seen as a quid pro quo arrangement, benefiting both parties. When a new administration takes office, the Fed is willing to support their policies, regardless of party affiliation. This unwritten rule ensures that the Fed favors the incumbent and increases their chances of being renominated.
However, Schiff believes that this time, Powell is more likely to support Biden due to a strained relationship with former President Donald Trump. Despite initially being appointed by Trump, Powell faced repeated criticism from him during his presidency.
Powell pretty much knows that his job ends with a Trump presidency. Trump is not going to renominate Powell. I think there’s a lot of bad blood there between Powell and Trump, Schiff explains.
Furthermore, with a tight race and a weak economy, Biden’s success heavily relies on the Fed’s support. Schiff expects the Fed to intervene in an election year, even if it means projecting a false sense of economic wellbeing.
The only hope Biden has of pulling this off is with the cooperation of the Fed. If he doesn’t get that cooperation, there’s no chance, Schiff states.
Schiff’s views suggest that the Federal Reserve’s actions in the upcoming election could have a significant impact on the country’s financial landscape. He argues that these factors, combined with other challenges, could make 2024 a difficult year for the dollar, emphasizing the need for investors and the public to stay informed and prepared.
As the 2024 election approaches, the relationship between the Federal Reserve and the President will continue to be a topic of speculation and debate. The ultimate consequences of this dynamic on the US economy, and the global financial system, remain to be seen.
