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Political Pressure on the Fed and the Presidential Approval Ratings of the United States

Author

Listed:
  • Rangan Gupta

    (Department of Economics, University of Pretoria, Private Bag X20, Hatfield 0028, South Africa)

  • Christian Pierdzioch

    (Department of Economics, Helmut Schmidt University, Holstenhofweg 85, P.O.B. 700822, 22008 Hamburg, Germany)

Abstract

Much significant recent research has shed light on how presidential pressure on the Federal Reserve affects key macroeconomic and financial variables. We contribute to this mushrooming research from a political-economy perspective. Specifically, we find, based on monthly data from 1980 to 2026, that the U.S. presidential pressure on the Federal Reserve predicts a lower subsequent presidential approval ratings. We derive this empirical finding by means of random forests, a machine-learning technique, that renders it possible to control for several important macroeconomic and financial variables. We find that the link between presidential pressure and subsequent presidential approval ratings is nonlinear and that the importance of presidential pressure on the Federal Reserve for presidential approval ratings has increased strongly during the first and second presidency of Donald J. Trump.

Suggested Citation

  • Rangan Gupta & Christian Pierdzioch, 2026. "Political Pressure on the Fed and the Presidential Approval Ratings of the United States," Working Papers 202624, University of Pretoria, Department of Economics.
    • Handle: RePEc:pre:wpaper:202624
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    Keywords

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    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • E40 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - General
    • E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General

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