Implications for Market Stability and Investment Strategy
The Federal Reserve’s independence has long been a cornerstone of U.S. economic policy, designed to insulate monetary decisions from short-term political pressures. Yet, recent developments suggest this autonomy is under unprecedented strain. Political interference, particularly from former President Donald Trump, has eroded confidence in the Fed’s ability to act in the long-term interest of the economy. This erosion carries profound implications for market stability and demands a rethinking of investment strategies.
The Erosion of Institutional Trust
The Federal Reserve’s institutional design—14-year terms for Board of Governors members and a dual mandate of price stability and maximum employment—was intended to shield it…
