Tags: Financial Markets | Money | Trump Administration | art laffer | federal | reserve | economy

Art Laffer: No Reason to Have Independent Federal Reserve

newt gingrich stands very closely with art laffer as the two speak to each other
Former House Speaker Newt Gingrich and economist Arthur Laffer (AP)

By    |   Monday, 08 July 2019 02:48 PM

Battles between the Federal Reserve and the White House have been going on for years, economist Art Laffer said Monday, and he sees little reason for the Fed to remain independent. 

"The independent Federal Reserve has always been a problem for the White House," Laffer told Fox News' "America's Newsroom." "I don't see any reason why we should have an independent Federal Reserve to be honest. We should not have an independent military board either to make decisions. I don't think that we should have tax laws determined by a group of professors either. You know, it doesn't make any sense. But it has been going on."

President Donald Trump has been slamming Fed Chairman Jerome Powell in recent weeks for the board's refusal to cut interest rates, but Laffer said Monday he thinks the rates will eventually come down.

"Their job is not to bait the president," Laffer said. "Their job is to do a good job. With interest rates falling, I would expect the Fed to follow suit and lower interest rates as well. They have been doing it historically."

Historically, the Fed has followed the markets, but has not dropped the rates yet, and Laffer said that is because it is "taking the bait" and "being obstinate, stubborn."

"That has always been the case," Laffer said. "This is not new."

Over the weekend, Trump slammed the Fed and Powell, saying if the Fed "knew what it was doing" it would cut interest rates. He added the Fed's policy is suppressing stock market gains and putting the United States at a disadvantage with Europe.

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Economist Art Laffer said Monday he sees little reason for the Federal Reserve to remain independent.
art laffer, federal, reserve, economy, jerome powell
Monday, 08 July 2019 02:48 PM
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