Financial markets have not fully priced in the risks posed by Donald Trump’s attacks on the Federal Reserve, which include higher inflation and a loss of confidence in US government debt, economists warn in a survey by the Financial Times.
The US president’s interventions against the world’s most powerful central bank have led to fears that the Fed’s powers to set interest rates to keep inflation in check will be compromised.
In the poll of 94 economists based in the US and Europe, many feared that the assaults would lead to a permanent shift at the Fed towards prioritising jobs and lowering government borrowing costs once chair Jay Powell’s term as chair ends next year.