"As UBS's Paul Donovan highlighted in a note to clients earlier this week, a chairman overly sympathetic to the views of the White House may draw "parallels" with a partnership between President Nixon and Arthur Burns in the 1970s-which ended in disaster. "Burns ultimately faced rebellion within the ranks of the Fed, and the Fed has been showing more independence of spirit in its voting patterns on policy of late, so one should be cautious of reading too much into the actions of a single individual at the Fed," Donovan added."
"He explained: "So we know there's gonna be a new Fed chair, we know that they're probably gonna take Steven Miran's seat on the board. So in that sense, the leaning of the board from just inserting that person in and taking Miran out doesn't really change that much, assuming they have a similar policy leaning to Miran.""
The White House lobbied for rate cuts and changes to monetary policy, threatened to fire Fed chairman Jerome Powell, insulted him personally, attempted to remove other FOMC members, and visited the central bank's head office amid a tussle over renovation costs. Concerns arise that a Trump-nominated Fed chair overly sympathetic to the White House could erode institutional independence. UBS's Paul Donovan warned of parallels to the Nixon–Burns era and noted the Fed has shown growing independence in voting. Bank of America's Aditya Bhave said risks hinge more on the committee's broader composition than a single chair. The impact will depend on board appointments and Powell's future.
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