Renewed criticism of the Federal Reserve by Donald Trump has drawn warnings from leading banks and renewed debate over the independence of the US central bank, a cornerstone of financial market stability.
Trump has publicly questioned interest rate decisions and the leadership of the Federal Reserve, intensifying political pressure on the institution as it navigates inflation risks, slowing growth and uncertainty over future rate cuts. His comments have placed Fed chair Jerome Powell under increased scrutiny at a time when monetary policy signals are closely watched by markets.
Major financial institutions, including JPMorgan Chase, have warned that sustained political attacks on the central bank could undermine investor confidence and weaken the credibility of US monetary policy. Banking executives and analysts argue that the Fed’s ability to set interest rates free from political influence is essential for controlling inflation and maintaining long-term economic stability.
Market participants have reacted cautiously, with investors assessing whether political pressure could affect future decisions by the Federal Open Market Committee. Analysts note that while past presidents have criticised the Fed, repeated public challenges risk blurring the separation between elected officials and independent regulators.
Powell has previously defended the Fed’s independence, emphasising its mandate to pursue price stability and maximum employment based on economic data rather than political considerations. As the economic outlook remains uncertain, the episode has revived broader questions about governance norms, institutional resilience and the potential impact on US financial markets.
