From analysts at JP Morgan on Trump’s attack on Federal Reserve Chair Powell:
- Any reduction in the independence of the Fed would add upside risks to an inflation outlook that is already subject to upward pressures from tariffs and somewhat elevated inflation expectations.
- Moreover, market participants would likely demand greater compensation for inflation and inflation risks, thereby increasing longer-term interest rates, weighing on the outlook for economic activity and worsening the fiscal position.
- It has been hoped that these adverse consequences would dissuade the president from threatening Fed independence, though so far the president has often followed through on his intentions.
If ‘Mean Girls’ were made today it’d look something like this:
This article was written by Eamonn Sheridan at www.forexlive.com.
