logo

The last time a U.S. president exerted such pressure on the Federal Reserve was in 1971 with Nixon, and two years later the U.S. entered a period of stagflation.

By: blockbeats|2025/04/19 01:15:03
分享
copy
Original Article Title: "The Last Time a U.S. President Pressured the Fed Like This Was Nixon in 1971, Two Years Before the United States Entered the Era of Stagflation"
Original Article Author: Ye Zhen, Wall Street News

Trump is using tweet after tweet to threaten the Fed's independence, and the last time a U.S. president pressured the Fed like this was in 1971, on the eve of the United States' Great Stagflation.

In 1971, the U.S. economy was already facing a "stagflation" dilemma, with an unemployment rate of 6.1%, an inflation rate exceeding 5.8%, and a continued expansion of the trade deficit. In order to seek re-election, President Nixon exerted unprecedented pressure on then Fed Chairman Burns.

White House records show that in 1971, Nixon's interactions with Burns significantly increased, especially in the third and fourth quarters of 1971, with formal meetings between the two reaching 17 times per quarter, far exceeding the usual communication frequency.

This intervention manifested at the policy operations level as follows: in that year, the U.S. federal funds rate plummeted from 5% at the beginning of the year to 3.5% at year-end, and the M1 money supply growth rate reached a post-World War II peak of 8.4%. In the year of the Bretton Woods system's collapse and the dramatic transformation of the global monetary system, Burns' political compromises laid the groundwork for the later "Great Inflation," which was only resolved after Paul Volcker significantly raised interest rates beginning in 1979.

As a result, Burns carried the historical stigma. Today's Powell has no intention of repeating Burns' fate.

Burns' Compromise: Political Interests Override Price Stability

In 1970, Nixon personally nominated Arthur Burns to be the Chairman of the Federal Reserve. Burns was an economist at Columbia University and had been Nixon's economic advisor during the campaign, and the two were very close. Nixon had high hopes for Burns—not as a guardian of monetary policy, but as a "cooperator" in political strategy.

At the time, Nixon faced immense pressure to win re-election in 1972, and the U.S. economy had not fully recovered from the recession of 1969, with high unemployment rates. He desperately needed a wave of economic growth, even if it was a false prosperity created through "easy money."

Therefore, he repeatedly pressured Burns, hoping the Fed would cut interest rates and increase money supply to stimulate growth. The White House's internal recordings captured multiple conversations between Nixon and Burns.

On October 10, 1971, in the Oval Office, Nixon said to Burns:

"I don't want to go out of town fast... If we lose, this will be the last time a conservative is in Washington."

He suggested that if he failed to be re-elected, Burns would face a future dominated by Democrats, and the political atmosphere would change drastically. Faced with Burns's attempt to delay further easing policies by claiming that "the banking system is already very loose," Nixon directly refuted:

"The so-called liquidity problem? That's just bullshit."

Shortly after, in a phone call, Burns reported to Nixon, "We have lowered the discount rate to 4.5%."

Nixon responded:

"Good, good, good... You can lead 'em. You always have. Just kick 'em in the rump a little."

Not only did Nixon pressure Burns on policy, but he also made his stance clear on personnel arrangements. On December 24, 1971, he said to White House Chief of Staff George Shultz:

"Do you think we've influenced Arthur about as much as we can? I mean, how much can I put the screws to him?"

"If not, I'll bring him in."

Nixon also emphasized that Burns did not have the authority to decide on Federal Reserve Board appointments:

"He's got to understand, just like Chief Justice Burger... I'm not going to let him name his people."

These dialogues are from White House recordings, clearly showing the U.S. President's systematic pressure on the Fed Chairman. And Burns indeed "complied" and defended his actions with a set of theories.

He believed that a tight monetary policy and the consequent rise in unemployment were ineffective in curbing the inflation at the time, as the root of inflation lay in factors beyond the Fed's control, such as unions, food and energy shortages, and OPEC's control of oil prices.

From 1971 to 1972, the Fed lowered interest rates, expanded the money supply, and drove a brief economic boom, which also helped Nixon achieve his re-election goal. However, the cost of this "artificially created" economic prosperity soon became apparent.

Getting Around the Federal Reserve: The 'Nixon Shock'

Despite the Federal Reserve being the monetary policy enforcement agency, when President Nixon announced the decision to "temporarily suspend the convertibility of the US dollar into gold" in August 1971, he did not heed Burns' opposition. From August 13-15, 1971, Nixon convened a closed-door meeting with 15 key advisors at Camp David, including Burns, Treasury Secretary Connally, and then-Under Secretary of the Treasury for International Monetary Affairs Volcker.

During the meeting, despite Burns initially opposing the closure of the gold window, under Nixon's strong political will, the meeting directly bypassed the Fed's decision-making process and unilaterally decided to:

Close the gold window, suspending foreign governments' right to exchange dollars for gold; implement a 90-day freeze on wages and prices to curb inflation; impose a 10% surcharge on all imported goods subject to tax, protecting American products from exchange rate fluctuations.

This series of measures, known as the 'Nixon Shock,' shattered the foundation of the Bretton Woods system established in 1944, causing a surge in gold prices and the disintegration of the global exchange rate system.

Initially, wage and price controls temporarily suppressed inflation, with US inflation kept at 3.3% in 1972. However, by 1973, Nixon lifted price controls, and at this point, the consequences of excessive dollar circulation and supply-demand imbalance quickly became apparent. Coupled with the first oil crisis that same year, prices began to soar.

The US economy then fell into a rare 'stagflation' situation, with the inflation rate reaching 8.8% in 1973 and soaring to 12.3% in 1974, while unemployment continued to rise, forming a typical stagnation-inflation pattern.

At this time, Burns attempted to tighten monetary policy, only to find that he had already lost credibility. His reliance on political compromises and non-monetary measures laid the groundwork for 'Great Inflation,' until Paul Volcker took office in 1979 and thoroughly 'suppressed' inflation with an extreme tightening policy, thereby restoring the Fed's independent prestige.

Powell Absolutely Does Not Want to Be Another Burns

Burns' tenure left behind an average annual inflation rate of 7% and weakened the Fed's credibility. Internal Federal Reserve documents and Nixon's recordings show that Burns placed short-term political needs above long-term price stability, making his tenure a textbook example of central bank independence being undermined.

Some financial commentators have joked:

"Burns did not commit fraud, murder, or even pedophilia... His only crime was—cutting interest rates before inflation was fully under control."

In contrast, Volcker's successor, Paul Volcker, "choked" inflation with a 19% interest rate, causing a severe recession but emerging as the hero who slayed inflation in the eyes of Wall Street, economic history, and the public. History has shown that Americans can forgive a Federal Reserve chair who leads the economy into a recession, but they will not forgive a chair who ignites inflation.

Powell is well aware of this and has no intention of becoming the next Burns.

Original Article Link

猜你喜歡

Trust Wallet 遭黑客攻擊最大損失達350萬美元

Key Takeaways 最大受害者損失了約350萬美元，該錢包已休眠一年。 第二大損失達140萬美元，該錢包已休眠兩年以上。 黑客共竊取超過600萬美元加密資產，其中超過400萬美元已轉移至CEX。 自托管錢包面臨基礎設施漏洞的潛在風險。 WEEX Crypto News, 26 December 2025 近期，Trust Wallet 發生了一起嚴重的黑客事件，此次事件引發了業界廣泛關注。在這起事件中，Trust Wallet的一個錢包損失了價值高達350萬美元的加密資產，該錢包在此次攻擊前已經休眠了一年多。此外，另一個損失較大的錢包也損失了約140萬美元，在攻擊發生前已經休眠超過兩年。 Trust Wallet…

项目方將40萬美元BDXN代幣注入多個交易所

Key Takeaways 三個BDXN項目方相關的錢包地址向多個交易所存入價值約40萬美元的BDXN代幣。 這些代幣於兩個月前從項目方的錢包轉出。 相關監測由onchainschool.pro 提供。 代幣轉移涉及的地址包括0xD5682dcA35D78c13b5103eB85c46cDCe28508dfB等。 WEEX Crypto News, 26 December 2025 BDXN項目方關聯錢包的最新動向 近期，BDXN項目方的部分地址將價值40萬美元的BDXN代幣注入多家交易所。據onchainschool.pro的監測顯示，與BDXN項目方相關的三個主要錢包在過去三小時內完成這一轉移操作，而這批代幣則早在兩個月前便從項目方錢包中轉出。 監測機構報告及相關地址詳情 這次轉移操作首次由onchainschool.pro監測到，並在ChainCatcher等多家媒體上披露。根據報告的數據，涉及到的三個錢包地址分別是：0xD5682dcA35D78c13b5103eB85c46cDCe28508dfB、0xD0Fc2894Dd2fe427a05980c2E3De8B7A89CB2672以及0xAc245a570A914C84300f24a07eb59425bbdC1B48。這些地址攜帶的代幣價值總計約40萬美元。 轉移代幣的未來意圖及市場影響…

# 龐貝與互聯網：Base 網絡上的 PancakeSwap V3 池中流動性獎勵啟動

Key Takeaways PancakeSwap 透過 Brevis Incentra 在 Base 網絡引入了 12 個 V3 池並開始提供流動性獎勵。 使用者可以在 Optimism 平台上通過 Incentra 添加流動性，不僅獲得交易費用，還能賺取…

代幣 VS 股權，Aave 爭議的來龍去脈

這是 Aave 要面對的問題，更是整個行業要面對的問題

12月26日市場關鍵情報，你錯過了多少？

1. 鏈上資金：本日有 7.8 百萬美元流入 Hyperliquid；5.5 百萬美元流出 Solana 2. 最大漲跌幅：$ISLM、$FTN 3. 熱門新聞：Trust Wallet 將確保所有受影響的用戶都能獲得退款，用戶需盡快完成程序升級

加密聖誕劫：損失超600萬美元，Trust Wallet 擴展錢包遭駭分析

Trust Wallet 瀏覽器擴充功能 2.68 版被發現存在惡意後門，導致用戶資金被盜，總損失超過 600 萬美元。

熱門幣種

最新加密貨幣要聞

13:16

觀點：Flow 區塊鏈倒退決定未與主要橋接夥伴溝通，潛在的經濟損失可能遠超過漏洞本身。

BlockBeats 消息，12 月 28 日，deBridge 聯合創始人 Alex Smirno 在 X 平臺發文表示，Flow 團隊決定回滾區塊鏈，並聲稱正處於與關鍵生態合作夥伴（橋、中心化交易平臺、去中心化交易平臺）的強制同步窗口。deBridge 作為 Flow 主要橋接提供商之一，未收到來自 Flow 團隊的任何溝通或協調，可能存在較大風險。Alex Smirnov 表示，倉促回滾鏈造成的經濟損失可能遠超原始攻擊的影響，回滾會引入系統性問題，影響在受影響窗口期內採取誠實行為的橋、托管人、用戶及交易對手。Alex Smirnov 敦促所有 Flow 驗證者在明確相關補償計劃、生態合作...
12:46

泡泡地图：68個錢包成功阻擋 ATLAS 的起始交易（ICO），目前持有 47% 的供應量

BlockBeats 消息，12 月 28 日，有 60 萬粉絲的推特帳號 WhaleInsider 再次推廣 Meme 幣 ATLAS。ATLAS 在上線前不久，有 68 個錢包通過 ChangeNow 獲得了資金。這些錢包之前沒有鏈上活動，資金是在短時間獲得的，收到了類似數量的 ETH 且狙擊 ATLAS，這些地址目前持有價值 100 萬美元的 47% 的供應量。WhaleInsider 此前發文稱，受美國副總統 JD Vance 的寵物狗啟發而誕生的 Meme 幣 ATLAS 日內上漲 100%。
12:46

Pump.fun 已經回購價值超過 2.2 億美元的 PUMP 代幣

BlockBeats 消息，12 月 28 日，据 fees.pump.fun 数据显示，Pump.fun 昨日花费 7,958.42 枚 SOL（约 97.2 萬美元）回購 5.302 十億枚 PUMP。自 7 月 15 日開始回購 PUMP 以來，已累計回購價值約 2.22 億美元 PUMP 代幣，已使總流通供應量減少 16.085%。
12:16

DeBot 發佈賠償登記表，將在 72 小時內完成核實並進行全額賠付

BlockBeats 消息，12 月 28 日，DeBot 已发布賠償登記表，受影響用戶可登錄 DeBot 官網（PC 或手機網頁版）填寫，且登記表長期有效。DeBot 將在提交後 72 小時內完成核實，並對確認受影響的用戶 100% 全額賠付，賠付資金將直接發放至 DeBot 安全錢包地址。昨日晚間 DeBot 錢包被盜，部分用戶資產遭遇異常轉移。
11:46

Infinex: INX 代幣銷售已開放註冊

BlockBeats 消息，12 月 28 日，Infinex 发文称，INX 代幣銷售已開放註冊，將於 1 月 3 日至 6 日在 Sonar 平台進行代幣銷售，提供 INX 5% 的供應量，最終 FDV 為 9999 萬美元，鎖倉一年，可選擇提前解鎖。此次銷售的額度最低 200 美元，最高 2500 美元，隨機分配，但有加成機會。
閱讀更多
社區
iconiconiconiconiconiconiconicon

客戶服務：@weikecs

商務合作：@weikecs

量化做市商合作：[email protected]

VIP服務：[email protected]