Listen: Firings, the Fed’s future, and the fallout for policy and markets

President Trump’s recent actions, including his public criticism of Federal Reserve Chair Jerome Powell, his attempted dismissal of Fed Governor Lisa Cook, and the firing of the head of the Bureau of Labor Statistics, have ignited concerns about the independence of America’s key economic institutions.

The dollar has weakened in response, and the gap between short- and long-term US Treasury yields has widened to its highest level in nearly three years, reflecting expectations of rate cuts in the short term but higher rates further out, as the Fed works to contain inflation later on. Still, equity markets remain near record highs, and the overall market reaction has been measured.

In this podcast, ING’s Chief International Economist James Knightley explores how the Fed’s composition could shift over the coming year - and what that might mean for policy amid a weakening labour market and higher tariffs, while Padhraic Garvey, Head of Research, Americas, discusses whether the market reaction is a sign of confidence or complacency, and whether that resilience can hold.