A watershed legal battle over the White House’s attempt to oust a sitting Federal Reserve governor has only just begun, but if President Trump gets his way, it could leave him with much more latitude to steer the central bank’s decisions on interest rates and its oversight of Wall Street.
Mr. Trump is already relishing the idea.
“We’ll have a majority very shortly,” Mr. Trump said at his latest marathon cabinet meeting about the Fed’s powerful seven-person Board of Governors. “So that’ll be great.”
Mr. Trump plans to appoint loyal individuals to that board, and he would need to fill just one more seat for the balance of power to tip further in his favor. If that happens, it would give the president immense sway over an institution that is supposed to operate independently from the White House.
The president could also gain substantial leverage over another part of the Federal Reserve system — the 12 regional banks whose officials take turn voting on policy matters. The central bank’s staff are vulnerable, too.
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