WHAT'S NEXT FOR THE FED

The U.S. central bank was already contending with economic challenges. Now comes a political one.

- BY ANNE KATES SMITH

ALL eyes have been on the Federal Reserve Board lately. The path of interest rates is top of mind as the Fed continues to navigate its dual mandate of keeping inflation in check and maintaining full employment, amid worries about strengthening in the former and weakening in the latter. Expect cuts this year and next—with decisions on how many and how far still taking shape.

The larger question is about the path of the institution itself, as worries surface about the politicization of a central bank prized for its independence. President Donald Trump has excoriated the Fed, particularly Fed Chair Jerome Powell, for being “too slow” to cut interest rates—a move Trump believes will help ease the burden of federal deficits, as well as goose the economy overall and the housing market in particular. Though Trump has threatened, he has not tried to remove Powell.