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Will Deregulation Undermine Trust in Markets?

Will Deregulation Undermine Trust in Markets?

by Starling Insights

Starling Insights Editorial Board

Mar 05, 2025

Observations

In recent comments to the Financial Times, Vincent Mortier, Chief Investment Officer of asset management firm Amundi, warned that US President Donald Trump's push for greater control over independent regulators is a "big, big mistake" that could erode trust in the economy.

One of Trump's executive orders requires agencies to "consult with the White House on their priorities and strategic plans," giving the president greater influence over regulatory decisions. Mortier argued that the US economy relies on "checks and balances" and that concentrating power in the executive branch threatens democracy.

He warned that increasing deregulation, conflicts of interest, and a growing distrust in policy decisions could undermine confidence in US markets. "The biggest threat is whenever people, in particular big foreign investors, start to question the trust," he said.

While Trump has exempted the Federal Reserve's monetary policy functions from the order, concerns remain about its supervisory role. Mortier said he believes the administration understands that revoking Fed independence would have "very, very, very adverse consequences," particularly on 10-year US government bond yields. However, he expects ongoing pressure on the central bank, noting that the real test will come when Fed Chair Jay Powell's term ends in 2026. "Who will replace Powell?" he asked, hinting at further potential instability in US monetary policy.

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