NEW YORK–A new report from Goldman Sachs’ economists has found that any political interference in undermining the independence of central banks such as the Federal Reserve will lead to higher inflation, reduced stock prices and a weaker currency.

The report comes after President Trump has made numerous criticisms of the Fed for not lowering rates, and of its chairman, Jerome Powell. Trump has used social media to call Powell a “FOOL” and say he should be fired. He later backed off the latter statement.

The report, from Goldman Sachs economists led by Jan Hatzius, examined studies related to the independence of central banks around the world and found “Economic commentators broadly agree that more politically independent central banks are better able to balance their goals of maintaining low and stable prices while keeping economic output near full potential,” according to Fox Business.

According to the report, among the risks posed to the independence of central banks that were noted in the report is public political pressure, which “could erode the public’s perception of U.S. monetary policy independence.” 

Additional Risks

Other risks include legal changes that allow for the removal of Federal Reserve officials, Fox Business reported.

“Across countries, institutional changes that increased central bank independence – including the process for appointing and removing officials – lowered inflation by ½-1 [percentage point] in subsequent years, suggesting an inflation cost if such protections are reversed (even if not acted upon),” the economists wrote, according to Fox Business.