Former Fed Vice Chair Sees No Risk to Fed Autonomy Under Trump

WASHINGTON — Despite concerns raised by some Fed officials and economists about potential threats to the central bank's independence under President Donald Trump, former Fed Vice Chair Stanley Fischer has expressed optimism that the Fed's autonomy will remain intact. In an interview with Bloomberg News, Fischer stated, "The Fed is an independent institution, and it's very important that it remain independent."

Fischer's comments come amid growing uncertainty about the Fed's future under Trump's administration. The former Fed Vice Chair resigned in mid-October 2025, leaving the central bank with a vacuum of power and an unprecedented opportunity for Trump to reshape the central bank. However, Fischer's optimism about the Fed's autonomy suggests that he may not be overly concerned about Trump's influence on monetary policy.

Trump's statements and actions that have raised concerns about Fed autonomy include:

1. Calling for lower interest rates: In August 2024, Trump stated, "I feel the president should have at least a say in there. I feel that strongly. I made a lot of money. I was very successful. And I think I have a better instinct than, in many cases, people that would be on the Federal Reserve — or the chairman." (Source: CNN)
2. Criticizing Fed Chair Janet Yellen: During his 2024 campaign, Trump criticized Yellen for keeping interest rates too low. He said, "I think she's done a lousy job as chair of the Fed, and I think she's very political, and to a certain extent, she should be ashamed of herself." (Source: The Hill)

Fischer addressed these concerns in his interview with Bloomberg News, stating, "The Fed is an independent institution, and it's very important that it remain independent. The president has the right to nominate people to the Fed, but once they're confirmed by the Senate, they have to make decisions based on their best judgment about what's good for the economy, not what's good for the president."

Fischer also emphasized the importance of Fed independence for maintaining low and stable inflation, saying, "Countries with independent central banks generally have lower inflation. It's a good institutional arrangement, which has been good for the public, and I hope and strongly believe that it will continue."

Fischer's optimism about the Fed's autonomy can influence investors' decisions regarding interest rates and economic growth in several ways. If the former Fed Vice Chair expresses confidence in the Fed's independence, it can reinforce market expectations that the Fed will continue to make decisions based on economic data rather than political pressure. This can influence interest rates, as investors may be more willing to invest in longer-term bonds, which typically have higher yields, if they believe the Fed will maintain its independence and continue to manage inflation effectively. Additionally, investors may be more confident in the economy's prospects, leading to increased investment in equities and driving economic growth.

In conclusion, former Fed Vice Chair Stanley Fischer's optimism about Fed autonomy under Trump's administration can influence investors' decisions regarding interest rates and economic growth. By expressing confidence in the Fed's independence, Fischer can help reinforce market expectations that the Fed will continue to make decisions based on economic data, which can influence investors' decisions to invest in longer-term bonds, equities, and inflation-linked bonds. This can help drive economic growth and manage inflation risks effectively.