Daily Macro

Macro Notes - Political Pressure and What it Means for CPI

September 10, 2025

Bipan Rai

Managing Director, Head of ETF & Alternatives Strategy

A researcher at the University of Maryland has attempted to quantify just how much price levels can shift in response to political pressure in the US. Using 90 years of data, the conclusion is that if a president ramps up pressure on the Fed by half as much as Nixon did during his term – then price levels should be expected to rise by about 8%.

While some might quibble with that conclusion (how can we quantify the degree of pressure precisely?), we do find the below chart interesting. The number of annual interactions between a sitting US President and a Fed Reserve chair began to rise in the 1960s and then peaked in the 1970s. At the same time, we see a corresponding rise in year-over-year consumer prices.

Chart – Annual Number of President-Fed Interactions and CPI (Y/Y %)

Source: University of Maryland, BLS

Disclaimers

Any statement that necessarily depends on future events may be a forward-looking statement. Forward-looking statements are not guarantees of performance. They involve risks, uncertainties and assumptions. Although such statements are based on assumptions that are believed to be reasonable, there can be no assurance that actual results will not differ materially from expectations. Investors are cautioned not to rely unduly on any forward-looking statements. In connection with any forward-looking statements, investors should carefully consider the areas of risk described in the most recent prospectus.

The viewpoints expressed by the author represents their assessment of the markets at the time of publication. Those views are subject to change without notice at any time. The information provided herein does not constitute a solicitation of an offer to buy, or an offer to sell securities nor should the information be relied upon as investment advice. Past performance is no guarantee of future results.

This email is intended for informational purposes only. This email is for information purposes. The information contained herein is not, and should not be construed as, investment, tax or legal advice to any party. Particular investments and/or trading strategies should be evaluated relative to the individual’s investment objectives and professional advice should be obtained with respect to any circumstance.

BMO Global Asset Management is a brand name under which BMO Asset Management Inc. and BMO Investments Inc. operate.

Third Party Links and Content.

This article may contain links to other sites that BMO Global Asset Management does not own or operate. Also, links to sites that BMO Global Asset Management owns or operates may be featured on third party websites on which we advertise, or in instances that we have not endorsed. Links to other websites or references to products, services or publications other than those of BMO Global Asset Management on this [article, presentation, communication, material - revise as appropriate] do not imply the endorsement or approval of such websites, products, services or publication by BMO global Asset Management. We do not manage, and we are not responsible for, the digital marketing and cookie practices of third parties. The linked websites have separate and independent privacy statements, notices and terms of use, which we recommend you read carefully.

Any content from or links to a third-party website are not reviewed or endorsed by us. You use any external websites or third-party content at your own risk.

Accordingly, we disclaim any responsibility for them.

To no longer receive any or all email communications from us, please unsubscribe or contact us at one of the following: Global.AssetManagement@bmo.com, CASL Response, BMO Asset Management Inc. or BMO Asset Management Inc., each a member of BMO Global Asset Management, First Canadian Place, 43rd Floor, 100 King Street West, Toronto, Ontario, M5X 1A1, Canada.

To manage your email preferences, including subscribing to other email communications, visit our Subscription Centre.

“BMO (M-bar roundel symbol)” is a registered trademark of Bank of Montreal, used under licence.