Trump allies believe the Federal Reserve leans left
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The Federal Reserve system is designed to be insulated from partisan politics. But conservatives increasingly see it as an organization stacked with Democrats.
Why it matters: Expect the Fed's current leadership to face hostile questions from Republican lawmakers in the coming months on the appearance of partisan lean — and for President-elect Trump's appointees to seek to reverse that perceived drift.
By the numbers: In the 2024 election cycle, political donations by Federal Reserve system staff totaled more than $600,000, with 92% going to Democrats, a fact first flagged by Fed watcher and investor Joseph Wang on X and widely circulated in conservative circles in recent days.
- By contrast, in the 2000 election cycle, such donations were much lower (only about $32,000 total) and about evenly divided among Republicans and Democrats, according to data from OpenSecrets.
- A new Manhattan Institute study of the political activity among board members of the 12 reserve banks — positions with little role in policymaking but select the bank presidents — also shows a Democratic lean that has increased in recent cycles.
- It reflects efforts to diversify the bank boards, historically dominated by regional bankers and business leaders, to include more representation of nonprofits and labor unions.
Flashback: Republican lawmakers have objected in recent years to "mission creep" as Fed system economists have studied topics outside the central bank's usual remit, like climate change, inequality and racial justice.
What they're saying: "It looks like the Fed staff is turning much more left wing than the median voter, and the directors are tending to do the same," Judge Glock, a senior fellow at the Manhattan Institute and author of the directors report, tells Axios.
- "The goal of independence, of course, is very important," he adds. "But if the institution is basically a self-perpetuating group that is following its own ends, totally divorced from what the median voter or the political branches would want, I think it's legitimately a problem."
Reality check: The Fed's leader for the last seven years has been Jerome Powell, a Republican first appointed to the job by Trump. He was confirmed for his current term with 80 votes in the Senate, including 36 Republicans.
- After the political blowback to controversial research topics a couple of years ago, Fed researchers have been sticking more closely to core macroeconomic topics lately.
- Past officials of all political stripes describe a deep-seated culture of making monetary policy decisions based on data.
"Policymakers, not staff or directors, are solely responsible for making decisions about monetary and regulatory policy issues," a Fed spokesperson said in a statement to Axios.
- "Our nonpolitical professional staff support the policymakers by providing economic information and analysis," the spokesperson added. "We have no political staff at the Federal Reserve."
