Fed Independence at Crossroads: Powell Braces for Trump Shake-up

Federal Reserve Chair Jay Powell’s commitment to policy independence may be challenged when Donald Trump retakes office in 2025. Despite Powell’s firm stance on separating monetary policy from political influence, Trump’s potential economic agenda—including mass deportations, tariffs, and tax cuts—could significantly impact the economy. With inflation already above the Fed’s 2% target and a resilient economy, the Fed may need to keep interest rates higher for longer, especially when considering the potential effects of Trump’s fiscal policies.