From Goldman Sachs Research, this is Alison Nathan. Welcome to Top of Mind, a podcast that explores macroeconomic issues on the minds of our clients.

In this episode, we're taking a look at growing concerns about the independence of central banks around the world.

Here in the U.S., that independence has been threatened by President Trump's clear disapproval of the Fed.

Let's put it this way.

He's equated the Fed to a golfer who can't putt and called its logic faulty.

Now, White House pressure on the Fed to lower rates isn't anything new. We saw

this more than once back in the 70s and 80s. But this time around, President Trump's

criticism has been unusually vocal, unrelenting, and basically a mainstay on his Twitter feed.

We're going to be breaking records if we had a Fed that would lower interest rates would be like a rocket ship.

But we're paying a lot of interest and it's unnecessary, but we don't have a Fed that knows what

they're doing. Despite the very public criticism, Fed Chairman Jay Powell insists it's not

influencing the Fed's decisions. Here he is at the press conference last month after the Fed cut interest rates

for the first time in over a decade. We never take into account political considerations.

There's no place in our discussions for that. We also don't conduct monetary policy in order

to prove our independence. But it's not just the U.S. where there might be cause for worry.

The effectiveness and credibility of monetary policy

have been called into question across advanced economies, thanks to slow growth, a rise in

populism, and the potential need for more coordination between monetary and fiscal policy

in a world of already low interest rates. These concerns were somewhat reinforced by the appointment

of Christine Lagarde, a politician

rather than a central banker, as the next president of the European Central Bank. And the challenges

of resisting political influence are even more acute in emerging markets, where central banks are

...