ARI SHAPIRO, HOST:
President Trump often criticizes people he has appointed to top jobs in the government. Lately he is going after someone who sets monetary policy.
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PRESIDENT DONALD TRUMP: No, no. My biggest threat is the Fed because the Fed is raising rates too fast. And it's independent, so I don't speak to him. But I'm not happy with what he's doing.
SHAPIRO: That was Trump attacking Federal Reserve chairman Jerome Powell on the Fox Business Network last night. There's a history of tension between the White House and the Fed. And NPR's Uri Berliner joins us to tell us more about this. Hi, Uri.
URI BERLINER, BYLINE: Hello, Ari.
SHAPIRO: Let's start with what's happening right now. Why is the president going after the chairman of the Federal Reserve?
BERLINER: Well, back in July, he said he wasn't happy with the Fed's rate hikes. He suggested that they could interfere with the economic expansion. And then more recently, right after the stock market sell-off, he complained again, this time a lot more strenuously. He said the Fed had gone crazy and was out of control. Then, yesterday he dialed it up even more, saying the Fed was his biggest threat.
Now, the president's been criticized for these attacks, including by some former members of the Fed. You know, they say this can create political pressure that interferes with the Fed's independence. But others say, you know, the Fed is fair game and should really be able to defend its policies if they get criticized.
SHAPIRO: Yeah. We heard in that tape Trump saying, well, the Fed is independent, so I'm not going to attack them. But they're crazy, out of control, (laughter) the biggest threat. He's not the first president to attack the Federal Reserve. Tell us more about the history here.
BERLINER: Yeah, that's true. He's not. It hasn't happened that - so much recently. But, you know, back when Lyndon Johnson was president, he clashed with his Fed chairman, William McChesney Martin. This was in - Johnson was spending a lot on anti-poverty programs and the Vietnam War. Martin was a fiscal conservative, and he famously said the Fed's job was to take away the punchbowl just as the party was getting going.
So they didn't get along. And in 1965, LBJ summoned Martin to his ranch in Texas for a stern talk. According to Martin's oral history, LBJ said to him, Martin, my boys are dying in Vietnam, and you won't print the money I need.
Then there was Richard Nixon. Nixon pressured Fed chairman Arthur Burns to keep rates low in the run-up to the 1972 election. The first President Bush, he didn't criticize Alan Greenspan publicly when he was president. But years later, when he was out of office, he said he thought Greenspan cost him his re-election.
SHAPIRO: So it sounds like President Trump, who's known for violating norms, is keeping with a long-established norm here. Is there anything different about these attacks happening now?
BERLINER: His rhetoric - not surprisingly - how blunt it is. Also, it's been very public. You know, I can't also think of any other president who said the Fed is crazy. When presidents are unhappy with the Fed, it's almost always for the same reason. Presidents want lower rates, easier credit flowing through the economy. That can boost growth and, not coincidentally, make presidents more popular.
But that can also lead to inflation. Presidents don't often worry about inflation. Central banks do, however. That's part of their job. So there can be this inherent tension between the Fed and the White House that can really pick up during an election year.
SHAPIRO: Right. It's independent but also serves kind of at the pleasure of the president. Is there any chance of Jerome Powell getting fired by President Trump?
BERLINER: There's no indication of that. The Fed is supposed to be protected from politics and politicians. Donald Trump has acknowledged that he's the one who appointed Powell and that the Fed is independent. But the Fed has really seemed to have gotten under his skin.
SHAPIRO: That's NPR's Uri Berliner. Thanks for joining us today.
BERLINER: You're welcome.
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