Trump’s Second Term and the Fed, IMF and World Bank
Why in the news
Analysts warned that Donald Trump’s second term could break sharply from the past, putting the Federal Reserve, the IMF and the World Bank under pressure.
Key facts
| Body | First term | Second-term risk |
|---|---|---|
| Fed | Pushed for lower rates, respected independence | Tariff and tax-cut inflation could spark clashes; attempt to remove Chair Jay Powell or install a loyal chair |
| IMF | Kept bipartisan appointees, used it on complex global issues | US gives about 20% of resources; exit could let China and others push long-blocked quota and voting reforms |
| World Bank | David Malpass appointed, few structural changes | US gave $2.8 billion in 2024; Bank mostly funds itself via bonds, and Europe could fill the gap |
- Signals: USAID has been shut; Project 2025 favours leaving both institutions; an executive order reviews membership of all international organisations.
- Trump appears less worried about markets than in his first term.
Consequences for the US
- Loss of soft power and influence.
- Seen as abandoning aid to developing countries.
- Less sway over global economic rules.
Exam angle
- Fed Chair named: Jay Powell.
- World Bank head in first term: David Malpass.
- Roadmap document: Project 2025.