Markets bet on cuts when Trump threatens Powell – research
Economists link attacks on Fed independence with expectations of policy easing
Traders increase their bets on future US rate cuts whenever president Donald Trump threatens to fire Federal Reserve chair Jerome Powell, researchers have found.
In a column published by the Centre for Economic Policy Research on July 29, Barry Eichengreen, Ganesh Viswanath-Natraj, Junxuan Wang and Zijie Wang examine how attacks on the Fed’s independence affect market expectations of policy rate movements.
The economists use high-frequency data from Polymarket, an online betting platform that
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