Trump Tests Fed’s Independence With Order Expanding Authority Over Agencies
Published On Feb 20, 2025, 12:59 PM
President Trump's recent executive order seeks to increase oversight of independent agencies, including the Federal Reserve. While the order does exempt the Fed's interest rate decisions, it allows for more presidential control over how the Fed regulates Wall Street and requires independent agencies to submit proposed rule changes to the White House. This move raises concerns about the potential erosion of the Fed's independence and possible influence on monetary policy, generating uncertainty in the financial markets.
Stock Forecasts
XLF
Negative
Given the increasing uncertainty in the regulatory environment and potential implications for market stability, investors may react negatively to the news of expanded presidential control over the Federal Reserve. The central bank's influence on interest rates and monetary policy could come under more scrutiny, potentially leading to volatility in the financial markets.
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