In my recent post that included Federal Reserve political independence, I dared to use the word ‘trust’, and commenters let me know that they were not pleased about it. In strict economic terms, there is no such thing as trust. Either that, or it’s the same thing as expectations or maybe low-information expectations. Since it wasn’t the main thrust of my post, I didn’t lay-out the informed reasoning behind my confidence in President Trump’s inability to cause Argentina or Turkey or even 1970’s US levels of political influence on the Fed.
In short, I’m not worried about it because the operational structure of the Fed and the means by which individuals join the Fed are determined by congress and are pretty robust. Below is a diagram that I made. I know that it’s a lot, but I’ll explain below.
Economist Writing Every Day 