The US Federal Reserve will face a significant risk of losing its independence due to stepped-up political interference if former US President Donald Trump is elected to lead the country again, according to the latest Bloomberg Markets Live Pulse survey.
In the poll, 44% of respondents said they expect Trump will try to politicize the central bank or limit its power when he returns to the White House. Overall, they estimate a 40% probability that the Fed will lose its autonomy under a second Trump administration.
An attempt to roll back central bank independence — a move that would face major hurdles — would likely roil financial markets, undermine investors’ confidence in the Fed as regulator of the world’s largest economy and expose it to political pressure to lower interest rates. Those concerns are said to be especially acute now, with the central bank keeping its benchmark interest rate at its highest level in more than two decades to curb inflation and prevent the economy from overheating.
