A strange party pattern of confidence in the Federal Reserve: Planet of Money: NPR

Recently, when President Trump Shoot Federal Reserve Chairman Jerome Powell, the financial markets turned. Then Trump insisted He was not shooting Powell, but it still takes time to criticize the Federal Reserve Policy under the leadership of Powell. The market is cold, a little.

This confrontation between the president and the US Central Bank is inspired Planet money To cooperate with her brother podcast Indicator To make episode This is a preliminary on the federal reserve. This explains why economists and investors tend to believe that the independent central bank-an emptiness of presidential intervention-is extremely important to a stable, low-inflation economy. It exceeds a little history of Trump’s hostile relationship with the Federal Reserve during the Powell era, a man who was appointed to Trump to head the US Central Bank in the first place.

The episode also explains, the Federal Reserve is supposed to be isolated from party policy. But a new study shows how partisan policy has long affected the amount of American faith in the Federal Reserve. It is not simple as members of a political party that trusts in the federal reserve, and the other party members do not trust it. The American belief in the Federal Reserve was like a pendulum that swings with the presidential elections: People were tending to trust in the federal reserve more when their party leader sits at the White House. However, after this recent presidential election, this study finds the pendulum that was not swinging.

Old pendulum swing

in the studyEconomists Carolla Binder (at the University of Texas in Austin), Cody Cotor (at Hamilton College), and Abibrina named (in William and Mary), looking at the party views of the Federal Reserve. They first analyze the Gallup Poll and Michigan survey of consumers between 2001 and 2023.

Economists find a clear pattern in this historical data: a large indication of whether the respondents said they trust in the federal reserve is whether their political party controls the White House.

For example, if the defendant is democratic, they are more likely to express confidence in the federal reserve when President Obama was in office. If the defendant is Republican, they are more likely to express their confidence in the federal reserve when President Bush was in office (in the meantime, he tends to always be the most trusted in the federal reserve, whether democratic or Republican is in his position). Economists find that this is a “much larger factor than any demographic differences”.

It is somewhat strange because the White House does not invite the shots at the Federal Reserve. The central bank has always been independent of the political branches in making daily decisions.

More importantly, the phenomenon of Americans who express their confidence in the federal reserve when their political party dominated the White House was true during President Trump’s first term as well (although President Trump began around 2019, began to formulate Jerome Powell and the Federal Reserve Policy). Republicans were inclined to have a higher confidence in the Federal Reserve of Democrats, during its first term.

Economists wanted to know if anything had changed in President Trump’s second term. Will this style be repeated? The Republicans certainly did not trust the Federal Reserve more than Democrats during the Biden period. Will they start, as was the case in the past, to trust the Federal Reserve Bank now more than the Democrat now after the Republican took control of the White House?

This time, the pendulum was not swinging

To answer this question and more, economists conducted an online poll in early 2025 for more than 3000 Americans. They conducted this survey in two waves, shortly before a short period of Trump’s inauguration.

Economists survey indicate that in reality, this time is different. Republicans crossed minimum Confidence in the Federal Reserve Bank of Democrats (and independent in the center, between Democrats and Republicans, in the amount of confidence in the Federal Reserve).

Economists provide some possible explanations. One of them is that the inflation explosion that started in 2021 “caused constant erosion of the credibility of the federal reserve between the Republicans.” Another interpretation: Republicans have become “more skeptical of technocratic”-or the experts of deep state, if you will-“regardless of who controls the presidency.” Perhaps the most simple explanation is that with Trump’s Powell and Federal Reserve Study in the media, his supporters are now looking at the Federal Reserve, during the Powell era, as hostile to a political tribe.

Binder, Couture and SMit have another strange discovery: although Republicans express less faith in the Federal Reserve, they were more likely to believe that inflation would be less in the future. It is strange because the largest federal reserve function is to manage inflation. Many Republican respondents were like, Nah, we do not trust the federal reserve. But also, a decrease will be dramatically enlarged.

Economists have provided space for the respondents to write the reason for their belief in what they believe in. Despite the potential inflationary effect of Trump’s hypotheses and migration suppression-Republican respondents often gave answers to indicate that they believe that Trump will lead to low inflation on its own through, for example, canceling business organization or greater energy production.

Meanwhile, the Democrats expressed the highest faith in the federal reserve. However, they were more likely to express concerns about inflation. Many of them tend to cite the definitions as a reason for their belief that inflation will get worse. Only many said, because, as you know, Trump.

Some of the results of these economists may be somewhat confusing for those who are closely seen by the Federal Reserve. But it may be less confused when you realize: Many Americans really don’t understand what federal reserves are or what he does! They may take their signals from the leader of their politicians. For the first time in decades, the president sent a strong indication that the Federal Reserve does not do what he wants.