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EDITORIAL: Editorial: The Federal Reserve works for us, not the president

San Diego Union-Tribune - 4/19/2019

April 20-- Apr. 20--The San Diego Union-Tribune Editorial Board has long held that a president should try to rise above politics when dealing with traditionally apolitical regulatory or judiciary government bodies, starting with the Supreme Court and the Department of Justice. Not every appointment should be treated as an opportunity to beat down political challengers or prop up devotees. Not every decision by entities that challenge the president's belief system should be categorized as political assault deserving of retaliatory tweets.

As with the Environmental Protection Agency or the Centers for Disease Control, the Federal Reserve should be informed by a vast array of academic research, historical data and the expertise of those delegated to perform their duties, not by the gut feelings of the president. No monetary policy decision should be based on how it factors into any particular office holder's electioneering efforts.

Our always-be-campaigning president has used the Fed's latest interest rate increases as an excuse for why the economy and the stock market aren't doing better following his tax cut, while ignoring other factors like trade wars and tariffs and the uncertainty they create. He even took steps to make sure his instincts get voice at the Fed by nominating two names from a shrinking list of available cronies: TV pundit Stephen Moore and 2012 Republican presidential candidate and one-time Federal Reserve Bank of Kansas City chairman Herman Cain.

Thursday, Cain argued in an op-ed in The Wall Street Journal that his voice is "needed at the Fed" to fight the "professor standard" even though four Republican senators have said they won't support him. Trump, who has placed disruptors at the head of departments and agencies with which they have grievances before, has so far seemed indifferent to congressional opposition to his Fed choices.

Fed independence is a cornerstone of U.S. economic success and its decisions should be targeting the financial well-being of the nation as a whole.

Raising rates to allow the Fed some wiggle room in any future slowdown seems wise and is likely not holding back the economy. It surely helps those with traditional savings account nest eggs earning near to nothing since the 2008 financial crisis.

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