Fed Confidence Crumbles: Just 37% of Americans Trust Powell’s Leadership

Public trust in the Federal Reserve has plunged to historic lows. According to a recent Gallup survey, only 37% of Americans say they have confidence in Chair Jerome Powell’s ability to manage the economy—his second-worst rating ever. For perspective, Powell enjoyed 58% approval in 2020, but faith in the Fed has steadily eroded alongside persistent inflation and economic uncertainty.

The only comparable period in the past two decades was in 2014 under Janet Yellen, when confidence also fell below 40%. Today, however, the challenge is broader: the Fed isn’t just fighting inflation and slowing growth—it’s also contending with a public that questions its credibility.

Powell Hints at Rate Cuts

At the Jackson Hole symposium, Powell delivered what could be his last major speech as Fed Chair. With the labor market weakening but inflation still above target, Powell signaled that an “adjustment” may soon be needed—Fed-speak for interest rate cuts.

Markets reacted sharply:

The U.S. dollar dropped,

Treasury bonds rallied,

Stocks bounced after a turbulent week.

Yet analysts warn of risks. If hiring rebounds in September, premature cuts could overstimulate the economy while inflation remains elevated. Bank of America cautioned that the Fed risks a “policy error” by easing too early.

Politics Closing In

Minutes after Powell’s speech, Donald Trump criticized Fed board member Lisa Cook, vowing to fire her if she didn’t resign. Trump has long been at odds with Powell, calling him “an idiot” for not cutting rates faster during his presidency.

Now, Trump has already begun reshaping the Fed’s leadership. Allies such as Stephen Miran, who has argued that presidents should be able to dismiss central bankers, have been installed in temporary posts. The Bureau of Labor Statistics has also seen leadership replaced with Trump loyalists.

A Fragile Fed Independence

The Federal Reserve has historically prided itself on independence. But by the time of next year’s Jackson Hole meeting, there may be a new, Trump-approved chair. Whether that chair follows economic data—or political direction—remains uncertain.

Bond markets are already flashing warnings. Long-term Treasurys are underperforming shorter maturities, a sign investors expect the Fed to keep rates artificially low for political reasons rather than sound economic policy.

For now, Powell insists he will continue fighting inflation while watching labor conditions closely. But his departure could mark the end of the Fed’s cautious, data-driven approach—ushering in an era where monetary policy decisions are harder to read and potentially far more politicized. #FedDovishNow