Turkeyfication of the Fed

Updated: 2025.10.09 12D ago 6 sources
If a president can intimidate or remove Federal Reserve governors and force rate cuts, U.S. monetary policy risks Turkey‑style politicization. Erdogan’s 2021 purge and pressure on his central bank preceded inflation surging above 80%; similar interference in the U.S. could erode the Fed’s inflation‑fighting credibility fast. — It focuses debate on central bank independence as a first‑order institutional safeguard for price stability and growth, not a niche technocratic preference.

Sources

UK's Central Bank Warns of Growing Risk That AI Bubble Could Burst
msmash 2025.10.09 78% relevant
The Bank of England explicitly warns of a 'sharp repricing of US dollar assets' if the Federal Reserve loses credibility; the article ties this to Donald Trump’s attacks on the Fed—an example of politicization risks undermining central‑bank independence and market stability.
Türkiye’s Homemade Crises
Tyler Cowen 2025.10.04 87% relevant
The article’s core example—political pressure to keep rates low in Türkiye—maps directly onto the warning that politicizing monetary policy can produce Turkey‑style macro breakdowns. The KKM scheme and subsequent need for capital controls/financial repression illustrate the downstream risks of executive‑driven rate cuts.
Can Trump Do That?
Don Kettl 2025.09.02 82% relevant
The article spotlights Donald Trump’s effort to oust Jerome Powell and Lisa Cook and recounts Nixon’s pressure on Arthur Burns, illustrating how politicizing a central bank can undermine price stability—akin to Erdogan’s interference in Turkey’s central bank.
What are the markets telling us?
Tyler Cowen 2025.09.01 72% relevant
The article notes market‑implied inflation expectations remain around 2–3% despite claims that Trump is destroying Fed independence; this directly engages the 'politicized central bank → high inflation' warning by showing markets are not pricing a Turkey‑style outcome.
The richest third-world country
Noah Smith 2025.08.27 90% relevant
The article alleges Trump fired Fed Governor Lisa Cook on a dubious 'for cause' rationale to intimidate the central bank and shape monetary policy, mirroring the politicization dynamic warned of in 'Turkeyfication of the Fed.'
We’re becoming a Döner Republic
Jordan Weissmann 2025.08.26 100% relevant
Trump’s move to fire Fed Governor Lisa Cook and public pressure on Chair Jerome Powell, paired with the Erdogan precedent and mention of 'neofisherism.'
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