The End

• 1913: Federal Reserve Act signed into law by President Woodrow Wilson, establishing the Fed as the U.S. central bank to stabilise the financial system after banking panics.
  • Disagreement: Strong Senate opposition from progressives like Robert La Follette, who argued the Fed gave too much power to private bankers, and conservatives wary of centralised control.
• 1929-1933: Great Depression begins; Fed criticised for tight monetary policy, exacerbating economic collapse.
  • Disagreement: President Herbert Hoover clashed with the Fed, believing its inaction worsened the crisis, though he lacked authority to intervene directly.
• 1933: Banking Act of 1933 (Glass-Steagall) strengthens Fed’s regulatory powers, creates FDIC.
  • Disagreement: Some senators, like Carter Glass, pushed for stronger separation of commercial and investment banking, facing resistance from banking interests influencing Senate debates.
• 1935: Banking Act of 1935 restructures Fed, centralising power in the Board of Governors and reducing regional bank influence.
  • Disagreement: Senate banking committee members debated Fed independence, with some arguing for more government oversight, reflecting tensions with Roosevelt administration.
• 1951: Treasury-Fed Accord ends Fed’s obligation to monetise government debt at low interest rates, restoring monetary policy independence.
  • Disagreement: President Harry Truman pressured Fed to keep rates low to finance Korean War debt, leading to public disputes with Fed Chairman Thomas McCabe.
• 1978: Humphrey-Hawkins Act mandates Fed to pursue maximum employment and stable prices, formalising dual mandate.
  • Disagreement: Senate debates centred on balancing inflation control with job growth, with some senators pushing for stricter inflation targets.
• 1979-1987: Fed Chairman Paul Volcker raises interest rates to combat stagflation, causing recession but curbing inflation.
  • Disagreement: President Ronald Reagan criticised Volcker’s tight policies, fearing political fallout from recession; tensions eased as economy recovered.
• 2008-2009: Global Financial Crisis; Fed under Ben Bernanke implements quantitative easing (QE) and bailouts.
  • Disagreement: President George W. Bush and Senate faced public backlash over bailouts; senators like Bernie Sanders criticised Fed’s secrecy and Wall Street favouritism.
• 2010: Dodd-Frank Act increases Fed oversight and creates Consumer Financial Protection Bureau.
  • Disagreement: Senate Republicans, like Richard Shelby, opposed expanded Fed regulation, arguing it stifled economic growth; President Obama pushed for stronger reforms.
• 2018-2020: Fed under Jerome Powell raises rates, then cuts them amid trade tensions and COVID-19.
• 2020-2022: Fed maintains near-zero rates and massive QE during COVID-19 recovery.
  • Disagreement: Some Senate Republicans, like Rand Paul, criticised Fed for fuelling inflation, while President Joe Biden supported Powell’s reappointment despite progressive pushback.
• 2022-2025: Fed aggressively hikes rates to combat 40-year-high inflation, peaking at 9.1% in June 2022.
  • Disagreement: President Biden faced Senate pressure from progressives like Elizabeth Warren, who argued rate hikes hurt workers, while conservatives demanded tougher inflation measures.

If the FED really stands in Trump's way in an hour of financial desperation, could Trump/ Congress kill the FED. Theoretically it could by vote of Congress, and obviously this would have massive implications for both investors and Treasury's ability to service it's debt.

That would be a step too far for Congress, but Trump could push the envelope. In fact this weekend:

Trump Tariffs Ruled Illegal by Federal Appeals Court [Bloomberg]

Bessent Warns of US ‘Embarrassment’ If Tariffs Ruled Illegal [Bloomberg]

USD/OFFSHORE YUAN Monthly

China’s Biggest Bank Posts Profit Drop as Impairments Rise [Bloomberg]

Evergrande delisting marks end of era for China’s property sector [FT] 

UK bank shares tumble on fears of tax raid on sector [FT]