The U.S. Federal Reserve will face a significant risk of losing its independence to ramped-up political interference if former U.S. 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 to seek to politicize the central bank or limit its power if he returns to the White House. Overall, they put a probability of 40% on the Fed losing its autonomy under a second Trump administration.
A push to roll back the central bank’s independence — a step that would face significant hurdles — would likely rock financial markets, undermining investors’ faith in the Fed as overseer of the world’s largest economy and exposing it to political pressure to cut interest rates. That concern would be especially acute now, when the central bank is keeping its benchmark rate at a more than two-decade high to curb inflation and prevent the economy from overheating.