Trump "2.0" Challenges Fed's Independence, Wall Street on Edge
BlockBeats News, December 29th. As Trump ushers in the "2.0 era," the Fed is facing unprecedented political pressure. Trump has not only rarely appeared on the Fed's construction site to publicly dispute with Chairman Powell, but has also repeatedly criticized its monetary policy. He has even been reported to attempt to undermine Powell's influence through a "shadow chairman" mechanism, raising concerns in the market about the central bank's independence.
Reports point out that Trump has accused Powell of "politically motivated rate cuts" and has turned his criticism towards other members of the Federal Open Market Committee (FOMC), including attempting to push for the removal of Fed Governor Cook, with the related case set to go to trial in January next year. This move is seen as a significant challenge to the boundary between the White House and independent agencies.
Against this backdrop, there is a trend of "selective silence" within the Fed and among related personnel, emphasizing that policy is based solely on economic data to avoid further political conflict. Although analysts believe that the Fed's institutional independence and market oversight remain robust, successful high-level interference in personnel matters could once again put inflation expectations and market confidence under pressure.
Meanwhile, the White House is advancing the public selection process for the next Fed chair, causing market concerns that this will prematurely weaken Powell's authority and deepen internal divisions within the Fed. Wall Street generally believes that in the short term, policy uncertainty is rising, and the Fed's century-old independence is facing a severe test.
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