July 24th, 2023 7:00am PDT
(PenniesToSave.com) – Several Republican presidential candidates, including Donald Trump, Ron DeSantis, Mike Pence, and Vivek Ramaswamy, are showing early popularity in their quest for the 2024 nomination. While these candidates hold different perspectives on various issues, they do share a collective dissatisfaction with the operations of the Federal Reserve.
In national surveys conducted recently, it has become evident that only four candidates have garnered support from GOP voters at or above 5%. These individuals are currently campaigning throughout the country, advocating for changes that could have a profound impact on the US central banking system. With almost 85% of GOP primary voters expressing favor towards one of these candidates, there is a high likelihood that reforms to the central banking system will be explored in the upcoming GOP administration in 2025 or beyond.
During a speech at the Family Leadership Summit in Iowa, Florida Governor Ron DeSantis voiced his opposition to the Federal Reserve, specifically criticizing the idea of a central bank digital currency. While focusing on social issues, he received applause from the evangelical audience for his stance against this concept.
It is unclear whether any of the mentioned candidates will genuinely push for reforms within the Federal Reserve. Despite Donald Trump’s continuous criticism of Jerome Powell during his presidency, significant structural changes were not accomplished during his time in office.
Investors would naturally approach any potential alterations to the Federal Reserve with caution. However, market focus on the Fed is expected to remain high, particularly in anticipation of an upcoming interest rate meeting in Washington next week.
Now let’s examine the viewpoints expressed by the various candidates concerning Chair Powell and other officials in Washington.
Donald Trump Promises
In the Republican Party race, Donald Trump takes the lead, and he has had an ongoing contentious relationship with the Federal Reserve. Despite appointing Jerome Powell as the Chair of the Fed in 2018, Trump consistently voiced his criticism through tweets, expressing dissatisfaction with Powell’s decisions.
In his previous administration, Donald Trump made efforts to alter the operations of the Federal Reserve by drafting an executive order. This order aimed to enforce a centralized regulatory review process for independent regulatory agencies like the Fed. However, this order was never issued, and there was limited progress in changing how the Fed functions.
In his presidential campaign in 2024, Trump is focusing on expanding the president’s control over the federal bureaucracy. However, he has not provided clear details regarding how this would impact the Federal Reserve (Fed). While he has expressed intentions to bring independent regulatory agencies like the FCC and FTC under presidential authority, there is uncertainty surrounding the Fed’s classification as an independent regulatory agency by law.
While Trump’s campaign website pledges to revamp federal bureaucracies and eradicate corruption and inefficiencies in Washington D.C., there is no concrete response from his representatives regarding his position on the Fed.
Other Candidates Critical of the Federal Reserve
Trump is not the sole candidate who has voiced concerns about the Federal Reserve. DeSantis, in particular, has consistently criticized the Fed throughout his campaign. He has referred to the current chairman as a “total and complete disaster,” attributing economic difficulties to excessive money printing by the central bank. DeSantis is also staunchly against the concept of a central bank digital currency and has reiterated this stance in various locations, including Iowa.
In contrast, former vice president Mike Pence has a different perspective that could also have significant consequences. He believes that the central bank should abandon its dual mandate and instead prioritize inflation exclusively. This outlook was first expressed by Pence in 2011 when he introduced a bill in Congress to eliminate the Fed’s focus on the labor market.
There is an ongoing debate about the Federal Reserve’s role and priorities. Some, including Pence, argue that the Fed’s original purpose was to primarily focus on currency. However, in recent decades, the mandate expanded to include goals such as maximum employment and stable prices. Pence advocates for a return to the original mandate of the Fed.
Entrepreneur Vivek Ramaswamy takes an even more radical stance as a candidate. He not only advocates for the elimination of the dual mandate but also proposes a drastic reduction of 90% in Federal Reserve staff. Ramaswamy sees the upcoming 2024 presidential race as a crucial chance to redefine the central bank’s role and purpose.
Some candidates in the race have not been as vocal about their stance on the Federal Reserve. Nikki Haley and Chris Christie, for example, have prioritized other campaign issues and haven’t shared specific positions on the Fed through public statements or their websites. However, it’s worth noting that Christie did express criticism towards the Fed back in 2015.
Senator Tim Scott (R-SC), who serves as the ranking member of the Senate’s Banking, Housing, and Urban Affairs Committee responsible for overseeing the Federal Reserve, provides a more nuanced perspective on the Fed and its chairman Jerome Powell. Despite expressing some criticism towards Powell’s handling of recent banking issues, Scott voted in favor of his renomination. While he acknowledges the need for improvements in certain areas, Scott opposes sweeping changes to Fed regulations, particularly those related to capital standards within the banking system.
While candidates have varying opinions on the Federal Reserve, many are choosing to prioritize other campaign issues. Scott, who is currently polling at 3.2%, still has some room for improvement in the months ahead.