Trump’s Quiet Fed Takeover Could Be Bigger Threat Than Firing Powell – Evercore Warns
According to top analysts at Evercore ISI, the real risk to the Federal Reserve isn’t Trump firing Jerome Powell — it’s something more subtle and long-term: a quiet shift in the Fed’s direction.
If Trump wins the election, he will likely appoint people who support his views to key positions on the Fed board. This slow change, which analysts call “Trumpification of the Fed,” could weaken the central bank’s independence and shake global trust in U.S. financial policy.
Vice Chairman of Evercore, Krishna Guha, said this slow drift in how the Fed reacts to inflation, jobs, and interest rates could do more harm than removing Powell outright. Trump will have the chance to replace Fed Governor Adriana Kugler, and with more potential resignations, he could shape the Fed board in his favor.
Names like Kevin Warsh, Kevin Hassett, and even Thomas Waller are being floated as possible Trump picks. Some of them are known for wanting lower interest rates and looser policy. If they gain control, the Fed might cut rates faster and more aggressively than markets expect.
This kind of internal takeover could lead to market volatility, drop investor confidence, and make the U.S. look less stable in the global economy.
Impact:
If Trump reshapes the Fed, policy could turn more political than economic. Traders might see more rate cuts, weaker USD sentiment, and uncertain moves in global markets.