According to a J.P. Morgan research note, President Donald Trump's efforts to pressure the Federal Reserve into cutting interest rates could risk undermining the central bank's independence, raising the risk of inflation or politically-influenced monetary policy mistakes.
Trump has repeatedly urged the central bank to cut interest rates by as much as three percentage points to boost the economy and lower the cost of servicing America's more than $36 trillion national debt. He has suggested on several occasions that he may attempt to fire Federal Reserve Chair Jerome Powell, only to backtrack and repeat his calls for lower rates.
This week, Trump acknowledged that he discussed potentially firing Powell in a meeting with House Republicans, but told reporters that he doesn't think he will move forward with that plan.
Michael Feroli, chief U.S. economist at J.P. Morgan, wrote in a note Wednesday that with respect to Powell's potential removal the "immediate crisis may have passed, though we doubt we are entirely done with this saga."