Archive · 26 Jan 2026
Trump's Pressure on Fed May Raise Inflation
A professor studied how presidents, especially Donald Trump, have tried to influence the Federal Reserve, the group that controls interest rates.
He found that when presidents put pressure on the Fed, interest rates tend to go down.
This can lead to higher inflation and more ups and downs in the stock market.
The study shows that presidents often win these battles, which can be bad for the economy in the long run.
The professor thinks Congress should pass laws to protect the Fed's independence.
A study found that presidential pressure on the Federal Reserve leads to lower interest rates and higher inflation.
The study, called the 'Fed-President Pressure Index,' measured tensions between presidents and the Fed since 1980.
Higher pressure levels are correlated with lower fed-funds rates and increased market volatility, especially in small-cap stocks.
The current pressure index is at or near record highs, likely due to Trump's recent campaign against Fed Chair Jerome Powell.
The study concludes that presidential pressure often undermines the Fed's independence, with potentially harmful long-term economic consequences.
- Who
- President Donald Trump, Federal Reserve Chair Jerome Powell, Finance Professor Yosef Bonaparte
- What
- Study on presidential pressure on the Federal Reserve and its economic impacts
- When
- Study completed in September 2023, with findings relevant to recent events
- Where
- United States, with data from major news sources
- Why
- To understand the impact of presidential pressure on the Fed's independence and economic outcomes
- Study Author
- Yosef Bonaparte
- Study Title
- Fed-President Pressure Index
- Time Period Studied
- 1980 to present
- Impact of Pressure
- Lower fed-funds rates, higher inflation
- Market Impact
- Increased volatility, especially in small-cap stocks
- Current FPPI Level
- At or near record highs
- Author's Conclusion
- President usually wins, undermining Fed independence