# Interest Rate Policy Timeline The interest rate is the one price in the American economy that is **decided, not discovered**. Twelve people on the [[Federal Open Market Committee]] set it, and it reaches everything else — mortgages, credit cards, the government's own borrowing costs, the valuation of every stock and startup. That makes it the most political number in the country, and the story of how it has been set is really two stories braided together. **The first is a tug-of-war.** Presidents want money cheap, especially before elections; the [[Federal Reserve]] exists partly to refuse them. The Fed won its operational independence in 1951, lost it in practice between 1965 and 1972, won it back at enormous cost between 1979 and 1982, and — as of the Supreme Court's June 29, 2026 ruling in [[Trump v. Cook]] — holds it by one vote. None of it is in the Constitution. See [[Central Bank Independence]]. **The second is a relay of unintended consequences.** Every era's fix set up the next era's problem: the gold-standard Fed tightened into the Depression; the wartime peg turned the Fed into the Treasury's financing arm; the Burns Fed's accommodation became the Great Inflation; the Volcker cure bought a generation of credibility that the Greenspan Fed spent insuring asset prices; near-zero rates after 2008 rebuilt the economy and, along the way, built the fortunes this vault tracks; and the fastest hikes in forty years found the weak point in the banks' bond books. > [!info] How this page fits > This timeline follows **the price of money and the fight over who sets it.** The [[Financial System Timeline]] covers institutions, regulation and crises; the [[National Debt Timeline]] covers federal borrowing; [[Federal Funds Rate]] is the live indicator page; [[Monetary Policy Transmission Flow]] maps how a rate decision reaches a household; [[Federal Reserve System Tree]] maps who sits where. A note on instruments: before the 1950s the Fed's main lever was the **discount rate** charged at the regional Reserve Banks (the New York Fed's rate was the bellwether); from the 1950s the **federal funds rate** became the operating target, announced publicly only from 1994 and set as a quarter-point **range** from December 2008. ## The Chairs and the Pressure | Chair | Tenure | Appointed by | The pressure episode | |---|---|---|---| | [[William McChesney Martin]] | Apr 2, 1951 – Jan 31, 1970 | [[Harry S. Truman]] | [[Lyndon B. Johnson]] summons him to the ranch after the December 1965 hike | | [[Arthur Burns]] | Feb 1, 1970 – Jan 31, 1978 | [[Richard Nixon]] | Nixon presses for easy money before the 1972 election — on tape | | [[G. William Miller]] | Mar 8, 1978 – Aug 6, 1979 | [[Jimmy Carter]] | Left after 17 months to become Treasury Secretary; inflation kept rising | | [[Paul Volcker]] | Aug 6, 1979 – Aug 11, 1987 | Jimmy Carter | 1984: James Baker, with [[Ronald Reagan]] present, "orders" no hike before the election | | [[Alan Greenspan]] | Aug 11, 1987 – Jan 31, 2006 | Ronald Reagan | [[George H.W. Bush]] blames him for losing 1992: "I reappointed him and he disappointed me" | | [[Ben Bernanke]] | Feb 1, 2006 – Jan 31, 2014 | George W. Bush | Attacked from the right over quantitative easing ("currency debasement") | | [[Janet Yellen]] | Feb 3, 2014 – Feb 3, 2018 | [[Barack Obama]] | Candidate Trump says she keeps rates low to help Obama and "should be ashamed" | | [[Jerome Powell]] | Feb 5, 2018 – May 15, 2026 | [[Donald Trump]] | "Boneheads," "Too Late," a DOJ criminal probe, and an attempt to fire a sitting governor | | [[Kevin Warsh]] | May 22, 2026 – | Donald Trump | Hikes four months in; Trump says rates "should be 1%, or less" | The pattern in the right-hand column is the page's thesis in miniature: **the pressure is always toward lower rates, and it comes from whichever party holds the White House.** ## Peaks and Troughs | When | Rate | What it was | |---|---|---| | June 1920 | **7%** (NY Fed discount rate) | The post-WWI tightening that produced the 1920–21 depression | | October 1931 | 1.5% → **3.5%** (NY Fed discount) | Raising rates *during* the Depression to defend gold | | 1942–1951 | **3/8%** bills, **2.5%** long-bond cap | The wartime peg — rates set to finance the Treasury | | June 1981 | **19.10%** (effective fed funds, monthly average) | The Volcker peak; prime rate had hit 21.5% in Dec 1980 | | June 2003 | **1.00%** | The Greenspan low after the dot-com bust | | June 2006 | **5.25%** | End of seventeen straight quarter-point hikes | | Dec 2008 – Dec 2015 | **0–0.25%** | Seven years at the zero lower bound ([[ZIRP]]) | | Mar 2020 – Mar 2022 | **0–0.25%** | Back to zero for the pandemic | | July 2023 | **5.25–5.50%** | 22-year high; 525 basis points in sixteen months | | Dec 2025 – Sept 2026 | **3.50–3.75%** | After three 2025 cuts; held through the chair handover | | Sept 16, 2026 | **3.75–4.00%** | First hike since July 2023 — the current setting | ## Epoch 1: The Gold-Standard Fed (1913–1941) A young, decentralized central bank whose first loyalty was to the gold standard — and which repeatedly tightened into economic weakness to honor it. | Year | Event | Significance | |---|---|---| | 1913 | [[Federal Reserve Act]] signed (Dec 23) | [[Woodrow Wilson]] creates a lender of last resort; no concept yet of steering the economy with a policy rate | | 1920 | NY Fed discount rate raised to **7%** (June) | Up from 4.75% in late 1919 in three steps; the sharp 1920–21 depression follows | | 1929 | NY Fed discount rate raised to **6%** (August) | The Board finally lets New York tighten against stock speculation — weeks before the [[1929 Stock Market Crash]] | | 1931 | NY Fed discount rate raised **1.5% → 2.5% → 3.5%** (Oct 9 and Oct 16) | After Britain leaves gold (Sept 21), the Fed tightens to stop a gold outflow — in the middle of the [[Great Depression]] | | 1935 | Banking Act of 1935 | Centralizes power in a Washington Board of Governors under Marriner Eccles; the modern FOMC takes shape | | 1936–37 | Reserve requirements doubled in three steps (Aug 16, 1936; Mar 1 and May 1, 1937) | Required reserves hit the legal maximum; how much it caused the 1937–38 recession is still debated | **Epoch summary:** The indictment of this era was written in 1963 by [[Milton Friedman]] and Anna Schwartz in *A Monetary History of the United States*: the Fed let the money supply collapse and turned a downturn into the Great Depression. It became the founding text of [[Monetarism]], and its conclusion was eventually accepted by the institution itself — at Friedman's 90th-birthday conference in November 2002, then-governor [[Ben Bernanke]] told him: "You're right, we did it. We're very sorry. But thanks to you, we won't do it again." That promise is the direct ancestor of the zero-rate and quantitative-easing response to 2008. ## Epoch 2: The Peg (1942–1951) For nine years the Fed did not set interest rates at all. The [[Department of the Treasury]] did, and the Fed bought whatever bonds it took to hold them there. | Year | Event | Significance | |---|---|---| | 1942 | Treasury bill rate pegged at **3/8%**; long-term yields capped at **2.5%** (spring) | The Fed commits to finance [[World War II]] cheaply; the long-bond cap is an informal Fed–Treasury understanding, never announced | | 1946–48 | Peg kept after the war | Postwar inflation surges while the Fed is obliged to keep buying bonds — monetary policy is switched off | | 1950–51 | [[Korean War]] inflation | The Treasury wants the peg kept for war financing; the Fed wants out | | 1951 | [[Harry S. Truman]] summons the entire FOMC to the White House (Jan 31) | The next day the White House announces the committee has "pledged its support" to keep bond prices stable. **It had made no such pledge.** Marriner Eccles releases the FOMC's own account of the meeting — "the fat was in the fire" | | 1951 | Fed notifies Treasury it will no longer "maintain the existing situation" (Feb 19) | The open break | | 1951 | **[[Treasury-Fed Accord]]** (Mar 4) | Joint statement ending the peg and the "monetization of the public debt"; the Fed's operational independence dates from here | | 1951 | [[William McChesney Martin]] becomes chair (Apr 2) | The Treasury official who helped negotiate the Accord goes on to defend it for nineteen years | **Epoch summary:** The Accord is the Fed's real founding document as an independent rate-setter — and it is an agreement between two agencies, not a statute. That is why every later independence fight has been fought over norms, appointments and removal power rather than law. It is also the historical template for what the vault calls [[Fiscal Dominance]]: a central bank whose rate is set by the government's need to borrow. ## Epoch 3: Martin and the Punch Bowl (1951–1970) The first chair to run independent rate policy for a full generation — and the first to discover how far a president would go to stop him. | Year | Event | Significance | |---|---|---| | 1955 | Martin's "punch bowl" speech (Oct 19, New York) | The Fed's job is "to take away the punch bowl just when the party was really warming up" — Martin credited the line to "one writer." It becomes the canonical statement of countercyclical policy | | 1965 | Board votes **4–3** to raise the discount rate from **4% to 4.5%** (Dec 3) | Against the explicit wishes of the White House as [[Vietnam War]] spending ramps up | | 1965 | [[Lyndon B. Johnson]] summons Martin to his Texas ranch (Dec 5) | The documented line, per the Richmond Fed: "You've got me in a position where you can run a rapier into me and you've done it." The famous "boys are dying in Vietnam" line and the story that LBJ physically shoved Martin are **secondhand** — the meeting was not recorded | | 1966–69 | Guns-and-butter inflation builds | Martin wins the 1965 confrontation but spends the late 1960s accommodating deficits; inflation climbs from under 2% toward 6% | | 1970 | Martin's chairmanship ends (Jan 31) | [[Richard Nixon]] — who blamed the pre-election downturn of 1960 for his loss to Kennedy — replaces him with [[Arthur Burns]], the adviser who had warned him in March 1960 that the economy would dip before November | **Epoch summary:** Martin established the norm that a chair could defy a president — and demonstrated its limit. Winning individual meetings did not prevent the slow drift into the inflation his successor would let run. ## Epoch 4: The Great Inflation (1970–1979) See [[Great Inflation]] for the full 1965–1982 episode. The decade that made central-bank independence an article of faith — because it showed, on tape, what happens without it. | Year | Event | Significance | |---|---|---| | 1970 | [[Arthur Burns]] becomes chair (Feb 1) | Nixon's former White House counselor, installed by a president who blamed the 1960 downturn for his own defeat | | 1971 | [[Nixon Shock]] (Aug 15) | Nixon closes the gold window and imposes a 90-day wage-price freeze; the last external anchor on the dollar is gone | | 1971 | Nixon to Burns on the White House tapes (Dec 10) | Responding to news of another discount-rate cut: "You can lead 'em… Just kick 'em in the rump a little." | | 1972 | Nixon to Burns (Feb 14) | "I really don't care what you do in April, but between now and April… that can hurt us… in November." Money (M1) growth rises from roughly 4.5% in 1970 to over 7.5% annualized in the first half of 1972 | | 1972 | Nixon re-elected in a 49-state landslide (Nov) | The boom arrives on schedule; the inflation arrives after | | 1973–74 | Oil shock meets an accommodative Fed | Inflation reaches double digits in 1974 | | 1977 | Federal Reserve Reform Act (Nov 16) | Writes the Fed's goals into law — "maximum employment, stable prices, and moderate long-term interest rates" — the origin of the [[Dual Mandate]] | | 1978 | [[G. William Miller]] becomes chair (Mar 8) | A corporate executive with no central-banking background; inflation keeps rising | | 1978 | Humphrey-Hawkins Act signed (Oct 27) | Reinforces the employment goal and requires semiannual chair testimony to Congress | | 1979 | Burns's "The Anguish of Central Banking" lecture (Sept 30, Belgrade) | Burns argues the Fed could not have resisted the political and intellectual currents of the era by itself — the defense that became the indictment | **Epoch summary:** The Burns case is the reason "independence" became the profession's first commandment. It is also genuinely unresolved: economist Burton Abrams, who transcribed the tapes, concluded that whether Burns "responded to political pressure or out of personal economic convictions… may never be definitively determined." What is not in doubt is the outcome — an inflation that took a recession-inducing shock to break, and that permanently taught markets to watch *who* appoints the chair. See [[Inflation Expectations]]. ## Epoch 5: The Volcker Shock (1979–1987) See [[Volcker Shock]] for the episode as a standalone page. The only time in American history the Fed deliberately induced a deep recession to end an inflation — and was allowed to finish the job. | Year | Event | Significance | |---|---|---| | 1979 | [[Paul Volcker]] becomes chair (Aug 6) | Appointed by [[Jimmy Carter]] after Miller moves to Treasury | | 1979 | Saturday FOMC meeting switches to targeting nonborrowed reserves (Oct 6) | The Fed stops setting the interest rate and lets it go wherever controlling the money supply takes it — a [[Monetarism]]-flavored cover for tightening harder than it could have announced | | 1980 | Carter invokes the Credit Control Act, Executive Order 12201 (Mar 14) | Consumer credit controls deepen a sharp recession already under way (January–July 1980); lifted July 3 | | 1980 | CPI inflation peaks at **14.8%** (March) | About 11.4% under today's housing method — still the post-war high | | 1980 | Carter loses to [[Ronald Reagan]] (Nov) | Carter appointed the chair whose medicine is widely credited with helping cost him re-election | | 1980 | Prime rate hits **21.5%** (December) | Borrowing for homes, cars, farms and small businesses effectively stops | | 1981 | Effective fed funds rate averages **19.10%** (June) | The all-time monthly peak; the second, deeper recession begins in July | | 1982 | Unemployment reaches **10.8%** (November) | The highest since 1941; the Fed has been easing since the summer as the Mexican debt crisis breaks | | 1983 | Reagan reappoints Volcker | Inflation has fallen below 4%; the cure is conceded to have worked | | 1984 | White House library meeting | Per Volcker's 2018 memoir *Keeping At It*: chief of staff James Baker, with Reagan present and silent, tells him "The president is ordering you not to raise interest rates before the election." "I was stunned," Volcker wrote; he suspected the library was chosen because, unlike the Oval Office, it probably lacked a taping system. He was not planning a hike anyway, and made none | | 1987 | Volcker steps down after two terms; [[Alan Greenspan]] takes over (Aug 11) | Reagan's pick; Black Monday arrives ten weeks later | **Epoch summary:** Volcker converted the Fed's reputation from the institution that caused the Great Inflation into the one that ended it, and every successor has drawn on that credibility since. Two things are easy to forget. The cure was paid for by the people least able to afford it — farmers, builders, industrial workers — in two recessions. And the pressure never stopped; it simply went unrecorded. The Reagan White House made the same demand Nixon did, in a room chosen, Volcker believed, so no one would hear it. ## Epoch 6: The Greenspan Put (1987–2006) Low inflation, long expansions, and a new habit: the Fed cutting hard when markets fell and leaning only gently when they rose. | Year | Event | Significance | |---|---|---| | 1987 | Black Monday — the Dow falls **22.6%** (Oct 19) | The next morning the Fed "affirmed today its readiness to serve as a source of liquidity." The market learns the Fed will catch it | | 1992 | [[George H.W. Bush]] loses re-election | In 1998 he told David Frost of Greenspan: "I reappointed him and he disappointed me" — blaming slow rate cuts | | 1994 | First publicly announced FOMC decision (Feb 4) | Before this, markets inferred policy from the Fed's trading. The year's seven hikes take the rate from **3% to 6%** by Feb 1995 — remembered in the bond market as a massacre | | 1996 | Greenspan's "irrational exuberance" speech (Dec 5) | He names a stock bubble — and does not raise rates to deflate it | | 1998 | Three cuts in seven weeks — Sept 29, Oct 15 (between meetings), Nov 17 | After Russia's default and the Fed-organized rescue of Long-Term Capital Management; the funds rate falls to 4.75% | | 2000 | Funds rate peaks at **6.5%** (May) | The dot-com bubble bursts that spring | | 2001 | Eleven cuts, **6.5% → 1.75%** (Jan 3 – Dec 11) | Through the dot-com bust, a recession, and September 11 | | 2003 | Funds rate cut to **1%** (June 25) | Held there a year; mortgage credit and house prices take off | | 2004 | Bernanke's "The Great Moderation" speech (Feb) | The profession's victory lap: output and inflation volatility had fallen, and good policy got the credit | | 2004–06 | Seventeen straight quarter-point hikes to **5.25%** (June 30, 2004 – June 29, 2006) | Telegraphed so far in advance that markets barely flinched. Greenspan called the failure of long rates to rise a "conundrum" — the [[Term Premium]] at work | | 2006 | [[Ben Bernanke]] becomes chair (Feb 1) | Inherits the housing bubble at its peak | **Epoch summary:** The "Greenspan put" was never a policy — it was a pattern markets inferred from 1987, 1998 and 2001: when asset prices fall hard, the Fed eases; when they rise, it talks. That asymmetry is insurance, and insurance is worth most to whoever owns the most assets. It links directly to Greenspan's [[Free Market Fundamentalism]] and his refusal to regulate the markets he was backstopping — see [[Alan Greenspan]] and the [[Financial System Timeline]]. ## Epoch 7: The Zero Lower Bound (2007–2015) When the policy rate hit zero, the Fed invented new instruments — and a large part of the political right rediscovered [[Sound Money]]. | Year | Event | Significance | |---|---|---| | 2007 | First cut of the crisis, 50bp to **4.75%** (Sept 18) | The subprime unraveling has begun | | 2008 | Emergency 75bp cut (Jan 22) | Made between scheduled meetings as global markets slide | | 2008 | Fed begins paying [[Interest on Reserve Balances]] (October) | The quiet regime change: the Fed can now flood the system with reserves and still set a rate — the plumbing that makes QE possible | | 2008 | First large-scale asset purchases announced (Nov 25) | [[Quantitative Easing]] begins with mortgage-backed securities | | 2008 | Target set to a **0–0.25%** range (Dec 16) | The zero lower bound; [[ZIRP]] lasts seven years. See [[2008 Financial Crisis]] | | 2010 | QE2: $600 billion of Treasuries (Nov 3) | The political break | | 2010 | "Open Letter to Ben Bernanke" (Nov 15) | Twenty-three economists, investors and commentators warn the purchases "risk currency debasement and inflation." Signers include [[Kevin Hassett]] (now Trump's NEC director), [[Paul Singer]], Niall Ferguson, Amity Shlaes and John B. Taylor | | 2011 | Calendar [[Forward Guidance]]: rates low "at least through mid-2013" (Aug 9) | Talking about the future becomes an instrument in its own right | | 2012 | Formal **2%** inflation target adopted (Jan 25) | Measured by PCE prices. The target is not in any statute — the FOMC chose it | | 2012 | QE3, open-ended purchases (Sept 13) | No end date: the Fed buys until the labor market improves | | 2013 | The taper tantrum (May 22 – Sept) | Bernanke hints at slowing purchases; after the June 19 press conference the 10-year yield rises from 1.94% to above 3% by September 5 | | 2014 | [[Janet Yellen]] becomes chair (Feb 3) | The first woman to lead the Fed | | 2015 | Liftoff: first hike since 2006, to **0.25–0.50%** (Dec 16) | Seven years at zero end | **Epoch summary:** The inflation the 2010 letter predicted did not arrive for a decade, and when it came it had other causes. What ZIRP and QE did produce was asset-price inflation: when money is nearly free, anything valued on future earnings — stocks, venture-backed startups, real estate, crypto — reprices upward, and the gains flow to whoever already owns those assets. That is the monetary precondition for the fortunes behind the [[Tech Right]], traced in [[ZIRP]]. The right's turn against easy money in 2010 is also worth marking against what came next: by 2019 the Republican president was demanding rates below zero. ## Epoch 8: Liftoff and the President's Feed (2016–2019) The slow return to normal rates — and the end of the norm that presidents do not comment on them. | Year | Event | Significance | |---|---|---| | 2016 | Candidate [[Donald Trump]] on Yellen (Sept 12) | The Fed is "very political"; low rates have created a "false stock market"; Yellen "should be ashamed" of what she is doing to the country | | 2016 | Second hike, to **0.50–0.75%** (Dec 14) | A year after liftoff | | 2017 | Three hikes; balance-sheet runoff begins (October) | The first round of [[Quantitative Tightening]] | | 2017 | Trump names [[Jerome Powell]] rather than reappoint Yellen (Nov 2) | Yellen becomes the first chair since Burns in 1978 not given a second term | | 2018 | Powell becomes chair (Feb 5) | | | 2018 | Trump's first public criticism as president, on CNBC (July 19) | "I'm not thrilled." Criticism of the chair he appointed becomes a running feature of the presidency | | 2018 | Fourth hike of the year, to **2.25–2.50%** (Dec 19) | The high-water mark of the cycle; markets sell off hard into year-end | | 2019 | Three "insurance" cuts to **1.50–1.75%** (July 31, Sept 18, Oct 30) | The first cuts since 2008, made in an expansion | | 2019 | Trump on Twitter (Sept 11) | "The Federal Reserve should get our interest rates down to ZERO, or less," blaming "the naïveté of Jay Powell"; he calls the Fed's officials "boneheads" | **Epoch summary:** Three years apart, the same man said near-zero rates were a partisan favor to Obama and demanded *negative* rates for himself. The substance is less interesting than the break in form: the norm of presidential silence on rate decisions, observed roughly from Clinton through Obama, ended here. See [[Negative Interest Rates]]. ## Epoch 9: Pandemic, Inflation, and the Fastest Hikes in Forty Years (2020–2024) A new framework designed to let inflation run a little hot, an inflation that ran very hot, and a hiking cycle that found the weak point in the banking system. | Year | Event | Significance | |---|---|---| | 2020 | Emergency 50bp cut to **1.00–1.25%** (Mar 3) | Unanimous, between meetings, as the [[COVID-19 Pandemic]] reaches the US | | 2020 | Back to **0–0.25%** plus $700 billion of asset purchases (Sunday, Mar 15) | Vote 9–1 (Mester dissenting for a smaller cut). Purchases soon become open-ended | | 2020 | Flexible average inflation targeting announced (Aug 27, Jackson Hole) | After years of undershooting 2%, the Fed will let inflation run above target for a while to make up the difference — a framework built for the last problem | | 2021 | [[Joe Biden]] renominates Powell (Nov 22) | Continuity across parties, the old custom restored | | 2021 | Powell tells the Senate it is time to "retire" the word "transitory" (Nov 30) | The Fed concedes the inflation is not passing on its own | | 2022 | First hike, to **0.25–0.50%** (Mar 16) | Vote 8–1 (Bullard wanted 50bp). The Fed is widely judged late | | 2022 | 75bp hike to **1.50–1.75%** (June 15) | The largest single hike since 1994; June CPI comes in at **9.1%**, a four-decade high. The second round of [[Quantitative Tightening]] has begun | | 2022 | Fourth consecutive 75bp hike, to **3.75–4.00%** (Nov 2) | June, July, September, November — nothing like it since Volcker | | 2023 | [[Silicon Valley Bank]] fails (Mar 10); Bank Term Funding Program created (Mar 12) | Banks that loaded up on long bonds at zero rates hold large unrealized losses; the hikes turn a rate problem into a run. See [[Financial System Timeline]] | | 2023 | Final hike, to **5.25–5.50%** (July 26) | A 22-year high — 525 basis points in sixteen months | | 2024 | 50bp cut to **4.75–5.00%** (Sept 18) | Vote 11–1 (Bowman wanted 25bp); seven weeks before the presidential election | | 2024 | Cuts to **4.50–4.75%** (Nov 7) and **4.25–4.50%** (Dec 18) | December vote 11–1, Hammack preferring no change | **Epoch summary:** The 2020 framework was written to fight a decade of too-low inflation and was overtaken within a year by the highest inflation since the early 1980s. The hikes that followed worked without the recession most forecasters expected — but they exposed how much of the banking system had quietly bet that rates would stay near zero forever. The lesson rhymes with every earlier epoch: the Fed's framework is always calibrated to the previous crisis. ## Epoch 10: The Independence Fight (2025–2026) The most sustained executive campaign against the Fed since Nixon — this time conducted in public, through personnel, prosecutors and the courts — ending, so far, in a Trump-appointed chair who raised rates. | Date | Event | Significance | |---|---|---| | Jan–July 2025 | Five straight holds at **4.25–4.50%** | Waiting to see what [[Tariffs]] do to prices after the [[Liberation Day Tariffs]] (Apr 2) | | Apr 17, 2025 | Trump: Powell's "termination cannot come fast enough!" | He backs off days later; the threat has been made | | May 22, 2025 | [[Trump v. Wilcox]] stay order | While letting the President remove NLRB and MSPB members, the Supreme Court signals the Fed is different — a "quasi-private entity" with a "distinct historical tradition." The carve-out is seeded in an emergency order | | July 24, 2025 | Trump tours the Fed's headquarters renovation with Powell | The renovation becomes the administration's line of attack | | July 30, 2025 | Hold, vote 9–2 | Governors Christopher Waller and Michelle Bowman dissent for a cut — the first two-governor dissent since 1993 | | Aug 7, 2025 | Trump names [[Stephen Miran]], his Council of Economic Advisers chair, to a vacant Board seat | A sitting White House economist heads to the FOMC | | Aug 25, 2025 | Trump announces he is firing Governor [[Lisa Cook]] "for cause" | Ten days after FHFA director [[Bill Pulte]]'s mortgage-fraud referral; the first attempted removal of a governor in the Fed's history. Judge [[Jia Cobb]] enjoins it Sept 9 | | Sept 15–16, 2025 | Miran confirmed **48–47**, sworn in the next day | To a term expiring Jan 31, 2026 | | Sept 17, 2025 | Cut to **4.00–4.25%**, vote 11–1 | Miran dissents for 50bp — the first of six straight dissents for deeper cuts | | Oct 29, 2025 | Cut to **3.75–4.00%**, vote 10–2 | Miran wants 50bp; Kansas City's Jeffrey Schmid wants no cut. Balance-sheet runoff to end Dec 1 | | Dec 10, 2025 | Cut to **3.50–3.75%**, vote 9–3 | Miran for 50bp; Austan Goolsbee and Schmid for no change. Dissent from both sides at once | | Jan 9–11, 2026 | DOJ grand-jury subpoenas served on the Fed | Led by D.C. U.S. Attorney [[Jeanine Pirro]] over Powell's June 2025 testimony on the renovation. Powell, in a video statement, calls it a "pretext" | | Jan 28, 2026 | Hold, vote 10–2 | Miran and Waller dissent for a cut | | Jan 30, 2026 | Trump announces [[Kevin Warsh]] as his choice for chair | Formally nominated March 4. Sen. Thom Tillis holds the nomination over the Powell probe | | Mar 2026 | Judge [[James Boasberg]] quashes the subpoenas | | | Mar 18, 2026 | Hold, vote 11–1 | Miran for a cut | | Apr 24, 2026 | Pirro closes the Powell probe | Referred to the Fed's inspector general; the path to Warsh's confirmation clears | | Apr 29, 2026 | Hold at **3.50–3.75%**, vote **8–4** — Powell's last meeting as chair | Miran dissents for a cut; Beth Hammack, Neel Kashkari and Lorie Logan dissent against the statement's easing bias. Powell says he will stay on as a governor | | May 13, 2026 | Senate confirms Warsh as chair, **54–45** | | | May 15, 2026 | Powell's term as chair ends | The Board names him chair pro tempore until Warsh is sworn in | | May 22, 2026 | **Warsh sworn in as chair** | He takes the Board seat Miran vacated (term to 2040); chair term to May 2030 | | June 17, 2026 | Hold, **12–0** | Warsh's first meeting | | June 29, 2026 | [[Trump v. Slaughter]] (6–3) and [[Trump v. Cook]] (5–4) decided the same day | *Slaughter* overrules [[Humphrey's Executor v. United States]] for multimember agencies; *Cook* keeps Cook in her seat on a preliminary ruling — "for cause" requires notice and a hearing. **The Fed is now an explicit judicial exception, held by one vote** | | July 29, 2026 | Hold, vote 9–3 | [[Beth Hammack]], [[Neel Kashkari]] and [[Lorie Logan]] dissent for a **hike**. Powell votes as a governor | | Aug 7, 2026 | White House letter to Cook charging "gross negligence" (signed by [[Dan Scavino]]) | The administration supplies the process the Court said was missing | | Aug 28, 2026 | Warsh at Jackson Hole | "The responsibility for 65 months of sustained, elevated inflation sits squarely with the central bank." | | **Sept 16, 2026** | **Hike to 3.75–4.00%, vote 12–0** | The first increase since July 2023, aimed at an inflation driven substantially by the [[Iran War 2026]] energy shock (August CPI 3.4%; see [[Gas Prices]]). Trump: rates "should be 1%, or less"; he says he told Warsh "you might as well vote with the board because it's not going to matter" | **Epoch summary:** Every lever of pressure short of legislation was pulled: public demands, an attempted firing, a sitting White House economist placed on the committee, a criminal referral against the chair, and the selection of a successor. What the campaign got was a chair who hiked. That does not close the question — a chair who is hawkish by conviction is not the same thing as an independent institution, and the Cook case is still live on the merits — but it is the first data point, and it points the other way. The deeper change happened in the Court: independence is no longer a general principle of American administrative law, only a Fed-specific exception. See [[Central Bank Independence]] and [[Unitary Executive Theory]]. ## The Pattern 1. **The pressure only runs one way.** Truman in 1951, Johnson in 1965, Nixon in 1971–72, the Reagan White House in 1984, Bush in hindsight, Trump in both terms: every documented episode on this page is a president wanting rates *lower*. The reason is timing. Easy money delivers the boom before the election and the inflation after it; tight money delivers the recession immediately. That asymmetry is the entire case for independence. 2. **Independence has never been law.** The Accord was an agreement between two agencies. The 2% target is the FOMC's own choice. The [[Dual Mandate]] names goals, not insulation. Removal protection now rests on a 5–4 preliminary ruling that the Fed is special. Every foundation is a norm or an interpretation — which is why each fight has been about who sits in the chairs. 3. **Each fix is calibrated to the last crisis.** The peg answered the Depression and fed postwar inflation; Burns's accommodation answered 1960-style slumps and produced the Great Inflation; the put answered 1987 and fed two bubbles; zero rates answered 2008 and built fragile bank balance sheets; the 2020 framework answered a decade of low inflation and met the highest in forty years. 4. **Rates have a class shape in both directions.** The Fed's crisis tools work through asset prices, so easy money reaches asset owners first — the put, [[ZIRP]], [[Quantitative Easing]]. Tight money reaches borrowers and workers first — the farms, factories and construction jobs of 1980–82. Neither direction is neutral, and the politics of each era track who was on which side of that line. 5. **The sound-money right tracks the White House.** The 2010 open letter warned of "currency debasement" under a Democratic president; the Republican president of 2019 wanted rates below zero; the Republican president of 2026 wants them at "1%, or less." See [[Sound Money]] and [[Fiscal Dominance]] — the failure mode when a government's borrowing needs start setting the rate. ## Where It Stands (September 28, 2026) - **Target range:** 3.75–4.00%, after the Sept 16 hike. The September projections pencil in about one more quarter-point increase in 2026 and none in 2027; Warsh has deliberately avoided [[Forward Guidance]]. - **The Board:** Warsh (chair), Philip Jefferson (vice chair), Michelle Bowman (vice chair for supervision), Michael Barr, [[Lisa Cook]], [[Jerome Powell]], Christopher Waller. Miran is gone; Powell stayed. - **The long end:** the 10-year Treasury topped 5% the week of the hike — and mortgages key off the 10-year, not the policy rate. See [[Term Premium]] and [[Monetary Policy Transmission Flow]]. ## Watch - The remaining 2026 FOMC meetings — the first where the hawkish call and the political call point the same way is the real independence test. - *Trump v. Cook* on the merits, and the response to the Aug 7 "gross negligence" letter. - Powell's continued presence on the Board, which denies the administration a seat. - Energy prices and the [[Iran War 2026]] — the main driver of the inflation the hike is aimed at. ## See Also - [[Federal Funds Rate]] — the live indicator page - [[Federal Reserve]] · [[Federal Open Market Committee]] · [[Federal Reserve System Tree]] - [[Monetary Policy]] · [[Monetary Policy Transmission Flow]] · [[Central Bank Independence]] - [[Inflation]] · [[Inflation Expectations]] · [[Expectations Channel]] · [[Phillips Curve]] - [[ZIRP]] · [[Quantitative Easing]] · [[Quantitative Tightening]] · [[Interest on Reserve Balances]] · [[Negative Interest Rates]] - [[Financial System Timeline]] — institutions, regulation and crises; the companion chronology - [[National Debt Timeline]] — what the rate costs the Treasury - [[Financial System Hub]] · [[Economics Hub]] · [[Timelines Hub]]