The Fed Feels the Heat

Is the White House meddling with monetary policy?

Treasury Secretary James Baker likes to tell audiences that in a presidential election year there are three main issues: "The economy, the economy and the economy." Privately, he lets friends know that instead of again taking the job he had in 1980 as campaign manager for George Bush, he decided that "I can do more good for him right here by keeping this economy going." And how does he plan to do that? By putting pressure on the Federal Reserve, critics of the Administration say, to expand the money supply and reduce interest rates. As the campaign heats up, the Democrats...

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