“Big Short” investor Michael Burry is sounding the alarm about what could happen if a future Trump administration tries to exert direct control over the Federal Reserve, sharing his concerns in a recent episode of The Big Short Against the Rules Companion Podcast on Substack.
“I think when Trump starts running the Fed, it might become the end of the Fed because if he’s running the Fed, then everybody’s gonna hate it,” Burry said. “Not just me. So we’ll see. I think the Fed is, has done a lot of damage over the last a hundred years or since its inception in 1914. And I feel we don’t need the Fed. We don’t need it.”
Why Burry’s View Matters
Burry rose to prominence for correctly predicting the 2008 housing market collapse, a story later dramatized in the 2015 film The Big Short. Since then, his commentary has often been interpreted as an early warning signal for broader economic trouble.
His latest remarks link together his skepticism of the Fed, concerns over interest rate policy and fears of overinvestment in artificial intelligence, suggesting these forces could shape the financial landscape for Americans for years to come.
Burry on Trump, Rates and the Fed’s Role
In the podcast, Burry criticized both the way the Federal Reserve has operated over the past century and the possibility of political pressure driving its decisions on interest rates.
“Unless the Fed is going to say look, like, why are they gonna drop rates?” Burry said. “There’s no reason to drop rates. Now inflation’s starting to come up a little bit. The economy is muddling along, but our neutral rate is not 1 percent or 0 percent or where Trump wants it.”
The “neutral rate” is generally understood as the interest rate level where monetary policy is neither stimulating nor restraining the economy. Former President Donald Trump has been vocal about wanting that neutral rate near 0 percent, while the Cleveland Fed currently estimates it closer to 3.7 percent.
What Could Happen Next
Ryan suggested that aggressive political meddling in Fed policy could trigger a broader backlash and reshape how Americans view the central bank.
“Trump interfering might actually unite everyone against the Fed for the first time in a century,” he said. “Americans hate inflation more than they love their political tribe. And if the Fed becomes Trump’s lapdog, voters will finally ask the right question: Why do we need an ‘independent’ central bank that isn’t actually independent?”
