Bankers are open to changes at the Federal Reserve but want the agency to remain independent from the executive branch, according to IntraFi’s third quarter business outlook survey of executives from 416 banks.
Respondents prefer Vice President Kamala Harris’ stance that the autonomy of the Federal Reserve should remain as is — 64 percent — to former President Donald Trump’s view that the Federal Reserve should have less autonomy — 36 percent.
In August, Trump said presidents should have a voice in decisions made by the Federal Reserve. “I feel the president should have at least a say in there,” he said. “I think that in my case, I made a lot of money, I was very successful, and I think I have a better instinct than in many cases, people that would be on the Federal Reserve or the chairman.” Harris disagreed with Trump, pledging not to interfere with the central bank if she wins the election.
Of bankers who support structural changes at the Federal Reserve, 24 percent are in favor of shortening the appointment term of the chair and governors. Only 5 percent support requiring the Fed to consult with the president on interest rate decisions, an idea Trump has supported. Seven percent want to give the president power to demote and replace the Fed chair with one of the current governors.
The survey also touched on economic conditions. More than half of executives said conditions were unchanged from a year ago, compared with 30 percent who reported worse conditions. Forty-three percent expect conditions will be the same 12 months from now, while 33 percent expect conditions will worsen.
Nearly 40 percent cited a potential recession as the biggest threat to industry margins, followed by 31 percent who listed the Fed’s interest rate policy as the top threat. Seventeen percent listed regulation as their No. 1 concern. Eighty-one percent of banks have already started lowering interest rates, according to the report. Nine percent are waiting for rates to drop another 25 basis points before lowering deposit rates.
Thirty-eight percent said their bank’s current loan demand had increased over the past 12 months, while 27 percent reported no change in demand. Fifty-three percent expect loan demand will be higher 12 months from now, while 34 percent expect it to be unchanged.
Nearly half of executives reported unchanged deposit competition from a year ago, compared to 38 percent who reported an increase. Fifty-five percent expect deposit competition to be unchanged in the third quarter of 2025. Eighty-two percent said their bank’s access to capital was the same as 12 months ago. Seventy-four percent expect their access to capital to be unchanged in the third quarter of 2025.