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

Rangan Gupta () and Christian Pierdzioch ()
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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

No 202624, Working Papers from University of Pretoria, Department of Economics

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.

Keywords: Skewness; Presidential approval ratings; Political pressure; Federal Reserve; Random forests (search for similar items in EconPapers)
JEL-codes: D72 E40 E50 (search for similar items in EconPapers)
Pages: 22 pages
Date: 2026-09
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