Trump's Fed pressure campaign to lead to higher inflation: CNBC survey

Trump's Fed pressure campaign to lead to higher inflation: CNBC survey

President Donald Trump's ongoing pressure campaign on the Federal Reserve to lower interest rates is likely to lead to higher inflation, according to a recent CNBC survey. The survey, conducted among economists and financial professionals, revealed that a majority believe Trump's demands could result in increased inflationary pressures.

Trump has been vocal about his desire for the Federal Reserve to cut interest rates, arguing that it would stimulate economic growth and boost the housing market. However, many economists and financial professionals caution that such a move could lead to higher inflation. The Fed has been cautious in its approach, balancing the need to cool inflation with signs of slowing economic activity and a weakening labor market.

The survey findings come as the Federal Reserve prepares for its highly anticipated September 16-17 meeting, during which it is expected to vote on interest rates. The Fed is widely expected to announce a 25 basis point fed funds interest rate cut at the conclusion of the meeting .

Trump's pressure campaign on the Federal Reserve has taken several forms. He has publicly criticized the central bank and its chairman, Jerome Powell, and has urged the Fed to slash interest rates. Additionally, the Trump administration has attempted to remove Federal Reserve Governor Lisa Cook from her post, citing allegations of mortgage fraud. However, a divided appeals court blocked the administration's attempt to oust Cook, allowing her to continue working and attend the Fed's meeting .

The survey results highlight the potential risks associated with Trump's pressure campaign. While some argue that lower interest rates could stimulate economic growth, others warn that such a move could lead to higher inflation, making it more difficult for the Fed to maintain price stability in the long run.

In summary, the CNBC survey suggests that Trump's pressure campaign on the Federal Reserve could lead to higher inflation, according to economists and financial professionals. The survey findings underscore the importance of the Fed's independence and the need for policymakers to balance the competing demands of economic growth and price stability.