Not sure what economists would say but my sense is that Trump's intention to take over control of the Fed will potentially cause much more economic damage to the US than tariffs. This is because interest rates will become unstable, leading to a loss of confidence in borrowing, saving, and investing.
This economist says you're right. A return of Smoot-Hawley-level tariffs plus Erdogan-style control of the central bank would be extremely disruptive to U.S. growth and economic stability and surely lead eventually to a loss of its reserve currency status.
I agree
Ty for your insights on this, Bill; very informative
If Trump takes over the fed, the USD will cease to be the defacto global currency of trade, and fairly quickly. The Euro and the Renmimbi (Yuan) will replace it.
There are plenty of cautionary tales when a central bank is overridden: "Authoritarian ruler Tayyip Erdogan tried out an unorthodox economic theory: that lowering interest rates would reduce inflation. Instead, the inflation rate got as high as 85.5% in 2023" www.investopedia.com/what-would-h...
I will point out that the current leader of the Canadian conservative party, Pierre Poilievre, actively sought the firing of the Bank of Canada head, in a dangerous Erdogan-like attempt to force lower interest rates. financialpost.com/news/economy...
That's just crazy.
Yes, PP was seeking to turn our central bank from an internationally admired institution to a third-rate politicized entity. He opposed aid to Ukraine on the basis of a lie. He takes down journalists with "casual cruelty." He's afraid of undergoing a security check. He's a poser.
He has bad judgment in general if he thinks this is in Canada's interests. Heck he has bad judgment if he thinks positioning for any of that is in *his* own interests. 😕
And any half intelligent person would know this. So what does it mean about the people surrounding him that are probably coaxing him on?
Undercutting faith in the US markets, currency and bonds, would unleash a global crisis and realignment. But I'm just a groundling.