Donald Trump’s greatest success so far has been in bypassing Congress, packing the Supreme Court, and populating agencies and law enforcement with political loyalists.
He failed to do this in his first term and paid the price in 2020. But, by sticking to the Project 2025 programme inspired by Viktor Orbán’s 15-year-long capture of Hungary’s institutions, Trumpism has made itself harder to dislodge.
To Trump’s great frustration, however, the Federal Reserve has proved resilient despite his constant attacks on Chair (“Too Late”) Jerome Powell, attempts to remake the board of governors, and a criminal inquiry. Powell’s successor, who will be named next week, knows what to expect if he fails to deliver rapid interest-rate cuts.
Hungary has been here before. After Orbán returned to power in 2010 and tamed the media, universities, regulators and the judiciary, he turned on the central bank (MNB). In 2013, he imposed his right-hand man as governor, who cleaned house and imported heterodox policymaking. Orbán got his low interest rates but Hungary eventually paid a price in lost policy credibility, high inflation, weak growth and a devalued currency – factors threatening Orbán’s re-election in April.
As an MNB deputy governor from 2007-13, Júlia Király experienced this annexation of the central bank from the inside. Now a professor of finance and monetary economics at the International Business School in Budapest, Júlia talks about this, the bill that eventually came due and the huge fiscal challenges facing the next government.
“The way she talks about it, this was the central bank take over of MAGA dreams,” says Twenty-Four Two co-host Tim G. Jones. “Not only did they manage to get all their people in and get the people who were not aligned with Fidesz out but they also managed to carry out a discretionary monetary policy”.
Twenty-Four Two is hosted by Tim G. Jones and Pepijn Bergsen and is a podcast from 242.news - a newsletter focused on the remaking of Europe since Russia’s full-scale invasion of Ukraine on 24/2/2022.
