Trump is going to influence the US monetary policy or even to destroy the Fedís independence. This is what many analysts say after the recent Presidentís comments. But are they right? We invite you to read our careful examination of Trumpís remarks about the Fedís policy and find out what does it imply for the independence of the US central bank and the gold market.

ďIím not thrilled with his raising of interest rates, no. Iím not thrilled.Ē This is what President Trump said in an interview with Reuters on August the 20th, 2018. The financial markets did not like his comments and the US dollar declined in a response. Investors worry that Trumpís growing discontent may lead to clashes between the White House and the US central bank, and potentially to weakening or even to the loss of the Fedís independence. In such a scenario, we could see higher inflation, as central bankís independence promotes price stability.

Are these concerns justified? Well, unfortunately yes, at least to some extent. When politicians alter monetary policy for their own goals, it never ends well (for the economy, gold usually shines then). You can ask the Turks who suffer now because of the depreciation of the Turkish lira, resulting from President Erdoganís influence on the central bank.

OK, I know what you are going to say: the United States are not Turkey. Thatís true, but there are ugly precedents even in the US (actually, the entire premise of Fedís independence is in a sense absurd, as the central bank was created by the Congress and the seven members of the Board of Governors are nominated by the POTUS and confirmed by the Senate). For example, there was a clash between President Lyndon Johnson and Fed Chair William McChesney Martin, which supposedly included physical assault (as the story goes, Johnson summoned Martin to his Texas ranch and physically shoved him around his living room).

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