Economists Concerned Over Fed's Independence Amid Political Influence.
The U.S. Federal Reserve's independence is threatened by political interference, especially highlighted by President Trump's attacks on Fed Chair Jerome Powell. A Reuters poll indicates a majority of economists are worried about this influence, with concerns about interest rate decisions as tariff tensions and inflation rise.
The independence of the U.S. Federal Reserve is increasingly at risk due to mounting political interference, as reported by a Reuters poll of economists. While President Donald Trump has frequently criticized Fed Chair Jerome Powell over interest rate decisions, the central bank remains cautious in the face of tariff-related inflation threats.
Despite a recent jump in inflation, most members of the Federal Market Open Committee favor holding rates steady, though there is pressure from figures like Governor Chris Waller and Vice Chair Michelle Bowman for a rate cut. Economists are voicing concerns about the Fed's vulnerability to political pressures as Powell continues to hold sway over decisions.
Economists are divided on future rate cuts, with many awaiting clearer trade policy directions. Even as the U.S. economy slows, interest rate futures suggest possible reductions, but Trump's fiscal policies could spur inflation risks further. This uncertainty leaves the Fed in a challenging position as it navigates between policy and political pressures.
(With inputs from agencies.)
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