Gavekal Research said markets feared in 2025 that Trump might undermine the Fed
independence by nominating a political ally as chair, forcing rate cuts and
leaving inflation persistently above the Fed’s 2% target. Developments over the
past seven months make that scenario unlikely: the appointment of Kevin Walsh to
lead the Fed and the retention of 11 of 12 regional Fed bank presidents. At
Walsh’s first meeting earlier this month the Fed emphasized its commitment to
price stability, surprising some market participants who had expected a more
dovish stance.
