Since taking office in January, Donald Trump has had the Federal Reserve in his sights. He has described its governor, Jerome Powell, as a “numbskull,” “major loser,” and “stubborn mule” who “makes it hard for people to buy houses.” Part of reason for these insults is that the president likes interest rates to be low, and Powell has, thus far, been unwilling to oblige. Although the governor has signaled that a rate cut is on the cards for next month, by sticking to his guns for so long he has been following the principle of central bank independence.

According to this idea, central banks like America’s Fed are independent from the political whims of elected officials. This allows them to set interest rates and inject liquidity into failing financial institutions in the long-term interests of the global economy. But, as the economist Mona Ali explains in this interview, independence is not the same thing as impartiality. Both the 2008 financial crisis and the 2023 banking crisis saw the Fed act in a deeply partisan way, propping up ailing financial institutions that it believed posed a “systemic risk” to the broader economy — while ordinary people suffered from rising debts and unemployment.

But while there are many reasons to object to the behavior of the Fed, Trump’s current attempt to have Lisa Cook, one of its board members, fired should not be read as an attempt to democratize the deeply undemocratic institution. Rather, Ali argues, it is part of the president’s attack on the American administrative state, motivated by an authoritarian theory that states that he, rather than Congress, has complete control over every branch of government and can dispose of appointed officials as he pleases.