In a potential bid to reshape the nation's central bank, former President Donald Trump's team has reportedly formulated plans that would restructure the Federal Reserve, according to sources familiar with the matter. The proposed changes could grant Trump the ability to influence the Fed's actions, thereby undermining its independence from political entities, as reported by The Wall Street Journal.

The plans, as outlined by Trump's advisors, could provide the former president with a say in interest-rate decisions and the authority to remove Fed Chair Jerome Powell before his term ends in 2026. While cautioning that the campaign has not yet confirmed these plans, Trump's senior advisors, Susie Wiles and Chris LaCivita, emphasized that only official statements from President Trump or authorized campaign members should be considered as credible sources.

Additionally, the proposal suggests subjecting the Federal Reserve to review by the Office of Management and Budget when issuing new rules, a process already in place for other federal agencies. This move aims to further diminish the central bank's independence in matters of banking regulation.

Trump has previously expressed dissatisfaction with Powell's handling of interest rates during the COVID-19 pandemic. As the Federal Open Market Committee hiked interest rates consecutively for 11 times since March 2022 to meet the Fed's 2% inflation target, Trump voiced skepticism regarding Powell's timing. In a February interview with Fox News, Trump accused Powell of potentially lowering interest rates to benefit the Democrats in the run-up to the presidential election.

Powell, on the other hand, has steadfastly maintained that the Federal Reserve operates independently of political influences. During an April discussion, he asserted that the Fed's analysis is unbiased and in service to the public, with decisions made based on what is best for the economy in the medium and long term.

As the Republican Party's presumptive nominee, having convincingly defeated prominent figures like Florida Governor Ron DeSantis, former South Carolina Governor Nikki Haley, and entrepreneur Vivek Ramaswamy in the ongoing primary election, Trump's potential reshaping of the central bank could have considerable implications for U.S. monetary policy.

Although recent polls have shown Trump leading President Joe Biden in head-to-head matchups, the dynamics change when third-party candidates, especially Democrat-turned-Independent Robert F. Kennedy Jr., are included. Notably, Trump enjoys greater enthusiasm from young voters this time around, narrowing the gap that Biden previously held by nearly 20 points. However, the historically lower voter turnout among younger demographics and the implementation of restrictive voting laws in certain GOP-led state legislatures could pose challenges.

Meanwhile, Trump has been grappling with various legal issues, including an ongoing hush-money case in New York, stacking up against him in recent weeks. Moreover, his legal team appealed to the Supreme Court on Thursday with hopes of securing broad immunity for presidents concerning their actions in office.

It remains to be seen how Trump's potential influence over the Federal Reserve, if the plans materialize, will shape the nation's monetary policies and impact the economy moving forward.