Trump’s Fed criticism could raise borrowing costs, warns Citadel’s Griffin

Investing.com -- U.S. President Donald Trump’s criticism of the Federal Reserve could undermine its independence, potentially leading to higher inflation and increased government borrowing costs, according to Citadel CEO Kenneth Griffin and Chicago Booth Business School professor Anil Kashyap.

In a Wall Street Journal op-ed published Sunday, the authors identified two key challenges facing the United States: an unsustainable fiscal path and persistently high inflation, despite strong economic fundamentals.

They warned that if investors lose confidence in the central bank’s ability to tackle inflation without political interference, the government could face steeper costs as investors demand higher risk premiums to hold U.S. debt.

Griffin and Kashyap argued that Trump’s potential intervention, along with the recent dismissal of the Bureau of Labor Statistics head, has undermined the credibility of official economic data—trust that takes years to build.

The authors noted that Fed independence is not an entitlement but must be earned through transparency, accountability, and performance. This independence enables the central bank to make difficult choices necessary to curb inflation, which has been Congress’s aim since rising prices damaged the Biden administration in 2024.

The op-ed concluded that credibility in economic policy builds gradually through adherence to processes and respect but can be quickly lost if ignored. Preserving this credibility lowers borrowing costs, supports economic growth, and maintains global trust, making it a critical priority.

You May Also Be Interested In

• B. Riley’s Top Biotech Picks Ahead of 3Q26 Earnings Season
• Bernstein sees downside risk to Apple's December quarter results
• European AI-linked stocks rally After Anthropic’s $11.6 bln computing deal