By David Morgan
WASHINGTON (Reuters) -A Republican lawmaker tasked with scrutinizing Federal Reserve monetary policy wants the U.S. Congress to help stabilize financial markets by insulating the central bank from political influence, including from President Donald Trump.
After days of market turmoil triggered by Trump’s attacks on Fed Chairman Jerome Powell, Representative Frank Lucas said the president ultimately made the right call by stating clearly this week that he has no intention of firing the central bank chief.
“The president made a wise decision,” said Lucas, who chairs the House Financial Services Task Force on Monetary Policy, Treasury Market Resilience and Economic Prosperity.
“Between the tariffs, wars and all the things going on around the planet, we didn’t need any more uncertainty in the financial industry. We didn’t need any more uncertainty in the markets,” the Oklahoma Republican told Reuters in an interview. “The president made the right call.”
With Congress returning from spring break next week, Lucas said he wants his 14-member task force to identify policy initiatives that can shore up the Fed’s independence, enhance Treasury bond market liquidity and win enough support from Democrats to pass the House of Representatives and Senate.
“It’s not a government-owned bank. It’s owned by the banks. And, yes, the president nominates with Senate confirmation the governor and the board of directors. But they are independent,” Lucas said.
In conversations with his northwest Oklahoma constituents, Lucas said he likens Trump’s changing policy on tariffs and other issues to that of an old-fashioned horse trader. “He’s maneuvering, he’s pulling, he’s pushing, he’s throwing punches, he’s swinging,” the 65-year-old lawmaker said.
As a result, financial markets and businesses including Oklahoma energy producers and farmers can expect continued uncertainty.
“Even though stock markets have stabilized, even though the bond markets have stabilized some, still, there’s nothing certain out there,” Lucas said.
“Demonstrating that monetary policy is not going to be a political game of whoever the president is – and not just this president, but the next two or three or five or 10 presidents – I think that would be a stabilizing force,” Lucas said.
During a congressional career spanning more than three decades, Lucas has built a reputation for honest dealings in bipartisan negotiations.
But it is unclear how much Democratic support he can count on for his stated aim of insulating the Fed from political influence by curtailing its focus on climate change and social issues, which it monitors for financial risks. Lucas and other Republicans want the central bank to redouble its focus instead on inflation and the dollar’s role as a reserve currency.
