A Reuters poll conducted from July 17 to 23, 2025, reveals that more than 70% of 105 surveyed economists are increasingly concerned about the Federal Reserve’s independence amid growing political pressure. The concern primarily centers around Trump-appointed Fed Governors such as Christopher Waller and Michelle Bowman, both of whom have openly advocated for interest rate cuts, diverging from the broader Federal Open Market Committee consensus.
Despite these tensions, none of the economists expect a rate cut during the Fed’s upcoming July 29–30 meeting. Most anticipate the first rate reduction could occur in September, with only one or two cuts expected by the end of the year. The forecast reflects a cautious stance, underpinned by ongoing inflation pressures. Analysts predict inflation will remain above the Fed’s 2% target through at least 2027, making premature rate easing a potential risk to price stability.
The central issue for many economists is the perceived threat to the Fed’s ability to act independently of political influence. Former President Donald Trump has publicly pressured the Fed to lower rates and has even suggested removing Chair Jerome Powell, whose term runs through May 2026. Though such a move is not legally feasible without cause, the suggestion alone has prompted concerns about undermining the institution’s credibility.
This isn’t the first time the Fed has faced political scrutiny, but the current climate feels more acute. Former Fed Chair Janet Yellen has warned that such attacks could damage the perception of U.S. economic management and compared them to practices seen in less stable political environments. The practical independence of the Fed—its ability to act free of political interference, even if legally protected—appears increasingly fragile in the eyes of many analysts.
While the July meeting is expected to yield no rate changes, some internal dissent has become visible. Governors Waller and Bowman have signaled support for cutting rates sooner, suggesting a divide that reflects differing economic interpretations or political alignment. Some observers speculate that such voices are positioning themselves for future leadership roles within the Fed, further complicating the institution’s internal dynamics.
Economists also expressed concern about the quality of U.S. economic data, citing reductions in staffing at agencies like the Bureau of Labor Statistics and falling participation in key surveys. These issues may impact the reliability of the data used to guide monetary policy, which is particularly concerning during a time of heightened political scrutiny.
Growth projections remain modest, with U.S. GDP expected to slow to 1.5% in 2025 from 2.8% in 2024. A slight rebound to 1.6% is forecast for 2026. Such conditions suggest a delicate balancing act for the Fed: acting too soon could reignite inflation, while waiting too long might hamper economic momentum.
Investors are watching closely. Many have already adjusted their portfolios in anticipation of future rate cuts, favoring assets like gold and dividend-yielding equities as hedges against potential instability. There is also increasing anxiety in financial markets about the implications of eroded Fed independence, including higher long-term interest rates and increased inflation expectations.
Powell, for his part, has maintained that the central bank will continue to make decisions based on economic data rather than political pressure. Still, the challenges ahead could test the limits of that resolve. The Fed’s credibility rests not only on its actions but also on the belief that those actions are free from external influence.
