Trump’s Fed pressure campaign will lead to higher inflation, weaker growth, according to CNBC survey
President Donald Trump’s actions according to the Federal Reserve, according to 82% of the participants in the September CNBC FED survey, means an attempt to limit or eliminate the independence of the Central Bank.
These actions will cause weaker growth, higher inflation and unemployment and a lower value for dollars than the majority of 29 participants.
The questionnaire said that 41% of economists, fund administrators and questionnaires believe that the President’s actions aim to directly eliminate the independence of the FED and that 41% were designed to limit them. Only 10% say the President is acting to support the Fed’s independence.
“Trump administration will continue to print to print to increase economic growth at the expense of inflation, at the expense of inflation, at the expense of inflation,” the Trump administration, Fed’s attempts to reduce the independence of the Fed, and to increase inflation. He said.
“By assigning the Fed to the Fed to the Fed, Trump, the policies are going wrong or more likely or more likely or more likely to be reasonable, while maintaining an effective control on the policy,” Naroff Economics expects an effective control. “
However, Jefferies’ US economist Thomas Simons thinks that the threat of independence is “exaggerated”. “He said that the appointed power of Trump did not expect to have concentrated power according to the consensus of FOMC. The centralized power within the committee is the key to ensuring that the policy is not unjustly affected by the President.”
Nevertheless, the 68% majority thinks that the President’s actions will pressure up on inflation; And 57% say that this will cause higher unemployment; And 54% look at lower economic growth; 74 % believe that the US dollar will reduce the value.
However, the participants are generally divided on the impact on interest rates, and 39% believe that the president action will be foreseen by lower rates and higher rates for the same percentage.
Fed Decision Wednesday
The FED is convened with an agreement on an important dispute between the participants this week, but the Central Bank should do. 97% say that the FED will decrease quarter points, while only 41% think that this is the right move. The rest is equally divided, 28% reduces half a score, and 28% do not support the deduction-probably reflects a similar discussion in the Federal Open Market Committee.
On average, the participants foresee a greater decrease in the proportion of the FED funds this year, which decreases from the current level to 3.66% from 4.38% to 3.66%, roughly this year reflects three quarters of points deduction or a additional interruption compared to the July survey. Next year, the fund rate is estimated to fall to 3.13% in the July survey compared to 3.46%.
This view can reflect renewed concerns about growth and unemployment.
“The labor market is weak, consumers have not yet noticed tariff -guided inflation, and inflation pressures are likely to be temporary,” Metlife investment management Drew T. Matus said. He said. “The time to start a ratio -cut cycle of the Fed – the road is not a single movement,” the road is important. “
The participants expressed their recession concerns for the first time in four months, while the probability of stagnation increased from 31% to 40% in the previous survey. If one is fifty -five percent, if one is, 10 months, in July, a moderate recession of 38%. The increase comes with an estimation for a sharper increase in unemployment this year and next year, but the growth appearance did not change to 1.5% for 2025, but returned to 2% in 2026. Consumer price index forecasts for 2025, which will decrease for 2026 to 2.8%, but decreased by 2.8%.
“Tariffs and uncertainty continues to be the biggest threat to growth, but a decrease in Fed’s independence may contribute to these risks.” “Monetary policy works in the best way when the central banks get rid of political intervention.”
Who pays for tariffs?
The participants rely on the economic effects of tariffs a little more than the July survey, but the majority say they are still uncertain. The reason for this may be that 86% still see that price increases come from tariffs, and half of them believe that significant price increases are on the road. When asked who shoulder the cost of the tariffs, he says that the average participant was paid 31% by the consumer, 29% by wholesalers and importers and 23% by retailers. Only 18% of the tariff burden is decided by exporters and contradicts that the administration does not pay taxes by Americans.
“Economists, including myself, predicted the short -term inflationary effect of tariffs, including myself, because Richard Bernstein Advisors CEO, CEO of Richard Bernstein, said, because we did not predict tariffs and squeezing margins.” He said. “However, the last great weakness in employment seems to be the direct result of bored margins.”
The tariffs were thought to be the number 1 threat for economic expansion, and it followed uncertainty around the policy of the administration. The President’s efforts to limit or eliminate the independence of the FED were seen as the third greatest risk and then as a immigration policy.
Click Here To see the entire survey.
