Federal Reserve: Trump pressure and rate risks – Commerzbank
Commerzbank's Dr. Marco Wagner analyzes how Donald Trump’s past and potential future attacks on the Federal Reserve (Fed) affect its independence.
Dr. Marco Wagner of Commerzbank examines the impact of Donald Trump's past and potential future attacks on the Federal Reserve (Fed) on its independence. Based on the Central Bank Pressure Index, he notes that Trump's criticism waned after Kevin Warsh became Chair, but warns that renewed inflationary pressures and possible rate hikes could lead to fresh political interference and verbal assaults on the Fed.
The Fed has faced two significant verbal storms during Trump's presidency; the first in 2019 and 2020, then again in early 2025 when Trump urged the Fed to lower rates more quickly and personally attacked Chair Jerome Powell, urging him and Lisa Cook to resign. Even Warsh's appointment is unlikely to prevent Trump's criticism, as Trump had previously nominated Powell as Fed Chair, believing he would adhere to his monetary policy vision.
With the Fed's leadership change to Warsh, Trump's attacks on the Fed appear to have ceased temporarily. However, should inflationary pressures in the U.S. force the Fed to raise interest rates, Trump could target the Fed once more.
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