Will Trump end the Federal Reserve?

The key issue is that “ending the Federal Reserve” is not something a president can do unilaterally. The Fed is created by statute, so abolishing it would require Congress to pass major legislation and then survive the inevitable legal, political, and market backlash. Even a president deeply hostile to the Fed is much more likely to attack its independence, pressure it on interest rates, or alter leadership than to eliminate the institution itself.

Historical precedent also argues strongly against a literal end-of-Fed outcome. Populist or anti-central-bank rhetoric is common, but when presidents have clashed with the Fed, the result has been confrontation, not abolition. The institutional coalition needed to dismantle the central bank would have to include lawmakers, party leadership, and likely a tolerable economic environment for such a drastic step, all of which are unlikely to align before January 2029.

Against the market’s 6% yes price, my view is that the market is overpricing the tail risk of a dramatic redefinition of the event. There is some nonzero chance the market is capturing a broader interpretation, such as a radical restructuring, a merger-like proposal, or an event resolution standard that treats severe impairment as effectively “ending” the Fed. But if the resolution is meant literally, the chance remains very small, and 2% is a more defensible independent estimate.