GOP Rep. Lucas exploring legislation to safeguard Fed's independence

Rep. Frank Lucas (R-Okla.) said he’s exploring legislation that would ensure the Federal Reserve remains independent of political influence amid the Trump administration’s threat to fire Fed Chair Jerome Powell. 

"An independent Fed is a very important institution, and that debate I personally believe was settled in 1913,” Lucas said in talks with Semafor during the World Economy Summit. 

Lucas — who chairs the House Financial Services Task Force on Monetary Policy, Treasury Market Resilience and Economic Prosperity — said he hopes to win bipartisan support for the task force's legislative proposals.

"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," the lawmaker said in an interview with Reuters.

Lucas applauded Trump for saying he didn't plan to fire Powell but said he'd seek input on how lawmakers can further insulate the Federal Reserve from political winds.

"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," he added.

The task force is expected to hold its third hearing, on Treasury market structure and resilience, during the upcoming House session.

Democrats have long worried that Trump would seek to oust Powell in a push to lower interest rates, and those fears were fueled earlier this week when Trump publicly blasted the Fed chair, whom he first appointed.

“‘Preemptive Cuts’ in Interest Rates are being called for by many. With Energy Costs way down, food prices (including Biden’s egg disaster!) substantially lower, and most other ‘things’ trending down, there is virtually No Inflation,” Trump wrote Monday on Truth Social.

“With these costs trending so nicely downward, just what I predicted they would do, there can almost be no inflation, but there can be a SLOWING of the economy unless Mr. Too Late, a major loser, lowers interest rates, NOW,” the president continued.

Markets quickly dipped but then rebounded as Trump and Treasury Secretary Scott Bessent struck a more optimistic tone toward an eventual trade deal with China.

Trump also eased fears around a clash with Powell when he said Tuesday he had "no intention" to fire the Fed chair, whose term expires next year.

“The press runs away with things. No, I have no intention of firing him. I would like to see him be a little more active in terms of his idea to lower interest rates. This is a perfect time to lower interest rates,” Trump said.

Speaking with Reuters, the lawmaker noted the president's on-again-off-again tariffs have rattled his Oklahoma constituents, comparing the president to an old-fashioned horse trader. 

"He's maneuvering, he's pulling, he's pushing, he's throwing punches, he's swinging," Lucas said.

"Even though stock markets have stabilized, even though the bond markets have stabilized some, still, there's nothing certain out there."