September’s quarter-point rate cut from the US Federal Reserve’s Federal Open Market Committee (FOMC) plays out against a background of unprecedented political challenge.
The previously staunchly independent committee already has three key Trump appointees on its governing board out of a total seven (note only one, Stephen Miran, voted for a half point cut at the latest meeting).
If Chairman Jerome Powell and Michael Barr choose not to stand for their full terms, and the President is ultimately successful in getting Lisa Cook dismissed, then the White House could have a clear majority of Fed Governors at some point in 2026.
If this plays out what does a Trump influenced Federal Reserve look like? Scott Bessent, the US Treasury Secretary, summarised his thinking in a recent article, saying that the Fed suffers from “overuse of non-standard policies, mission creep and institutional bloat” which “are threatening the central bank’s monetary independence.”
Guy Monson and Subitha Subramaniam assess the fragility of the Fed today, speculate what a White House-influenced central bank would look like, and examine the implications for your portfolio
Watch the video below.