US President Donald Trump has signalled in an interview with the Wall Street Journal he is close to announcing his pick for the next chair of the US Federal Reserve.

With inflation again increasing amid widespread focus on the crisis of affordability, Trump’s appointment will be closely watched by financial markets and consumers alike.

The central bank has become a battleground as Trump seeks to extend his influence over Federal Reserve policy.

But the last time a US president attempted to interfere with the independence of the Federal Reserve provides a strong cautionary tale of the dangers of presidential interference.

Trump has a tumultuous relationship with the Federal Reserve and its current Chair Jerome Powell. Powell was first appointed chair by Trump in 2018, but the relationship quickly turned sour, with Trump repeatedly threatening to fire Powell for not cutting interest rates quickly enough.

Just last month, Trump called Powell a “clown” with “some real mental problems”, adding “I’d love to fire his ass”.

Existing protections mean Trump cannot fire Powell “without cause”, which the US Supreme Court has interpreted to mean corruption or misconduct. Trump has been forced then to wait for the end of Powell’s second term to replace him.

In the meantime, Trump has attempted to fire Lisa Cook, one of the seven Fed governors, by having his Justice Department investigate claims........

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