In an interview with CNBC on Thursday, Moody’s Analytics chief economist Mark Zandi said recent job numbers have been so dismal that it’s possible the U.S. may already be in a recession.

“I think the Federal Reserve desperately wants to avoid that kind of outcome,” he added. “Obviously nobody wants a recession. But also in the context of Fed independence, they really don’t want to get blamed for going into a downturn because that would impair their ability.”

Wharton finance professor Jeremy Siegel laid out just such a scenario in July, when he told CNBC that Fed Chairman Jerome Powell may need to resign in order to preserve the central bank’s long-term independence. 

His reasoning: If the economy stumbles with Powell still at the helm, then Trump can point to him as the “perfect scapegoat” and ask Congress to give the White House more power over the Fed.

“That is a threat. Don’t forget, our Federal Reserve is not at all a part of our Constitution. It’s a creature of the U.S. Congress, created by the Federal Reserve Act 1913. All its powers devolve from Congress,” Siegel explained. “Congress has amended the Federal Reserve Act many times. It could do it again. It could give powers. It could take away powers.”

Meanwhile, Stephen Miran is set to join the Fed—without resigning as chair of the White House’s Council of Economic Advisers—after previously calling for changes that would erode its independence before he joined the Trump administration.

In a note last month, JPMorgan said Miran’s appointment to the Fed “fuels an existential threat as the administration looks likely to take aim at the Federal Reserve Act to permanently alter U.S. monetary and regulatory authority.”

Fed rate cut

Despite the enormous pressure Trump has put on the Fed to lower rates, even trying to fire Governor Lisa Cook, central bankers have largely resisted his calls so far. But the sudden deterioration in the job market has made a rate cut a virtual certainty.

The Fed meets Tuesday and Wednesday, and the only question on Wall Street is whether rates will come down by 25 basis points or 50 basis points from the current level of 4.25%-4.5%.

In a note on Friday, JPMorgan chief U.S. economist Michael Feroli said he expects two or three dissents for a larger cut and no dissents in favor of keeping rates unchanged.

At the Fed’s last meeting Fed governors Christopher Waller and Michelle Bowman dissented from other policymakers by calling for a quarter-point cut. It’s possible they could dissent again by voting for a half-point cut, Feroli said, with Miran expected to “dutifully dissent for a larger cut” as well.

On Thursday, Zandi said the bar is high for a half-point cut, but “there’s a possibility we could get over that.” He added that a JPMorgan forecast for six cuts by the end of 2026 is reasonable, assuming a neutral level for the fed funds rate is about 3%.

“It’s possible if the economy is weaker and recession risk higher and concerns about Fed independence greater that we get something a little lower than that, 2.5% to 3%,” Zandi said.