Andrew here. C.E.O.s have been almost entirely unwilling to publicly criticize President Trump. That makes a new opinion article by Ken Griffin, the billionaire financier and longtime Republican, decrying Trump’s efforts to undermine Fed independence all the more noteworthy. We’ve got a full rundown of his critique, as well as a fascinating new proposal by Treasury Secretary Scott Bessent to narrow the central bank’s remit.
We also highlight a new report about JPMorgan Chase’s connection with Jeffrey Epstein. And take a look at our Picture of the Day from Sunday’s U.S. Open men’s championship match — and who was in Rolex’s corporate suite with Trump.
“Steep costs”
A parade of economists and former Treasury secretaries have voiced alarm at President Trump’s assault on Fed independence. But business leaders have been mostly mum, despite fears that the threat could undermine investor confidence in U.S. institutions and financial assets, including the dollar.
Ken Griffin just broke that silence.
Griffin, the billionaire C.E.O. of Citadel, and Anil Kashyap, a University of Chicago professor and adviser to the Chicago Fed, warned that Trump was playing a “risky game” by bullying the central bank into lowering interest rates, seeking to fire a governor and sacking the head of the Bureau of Labor Statistics after disappointing jobs numbers.
These actions carry “steep costs,” Griffin and Kashyap wrote in an opinion piece in The Wall Street Journal on Sunday. They added:
Together, these developments highlight risks that recall experiences in emerging markets where political influence eroded institutional credibility. While the U.S. benefits from a large stock of credibility accumulated over decades, it isn’t limitless. If eroded, markets will demand far higher interest rates for longer-term debt.
Undermining Fed independence could backfire on Trump, they warn, potentially “stoking both higher inflation and higher long-term rates.” That would create another headwind for corporate profits.
It was some of the most concrete criticism of Trump yet by Griffin, who despite voting for Trump last year has openly criticized actions he doesn’t like.