Trump's Presidential Pressure on the Fed: Independence at Stake as the "Big Cake" Crumbles in a Horror Story?
Since his return to the White House in January 2025, President Donald Trump has once again set his sights on a familiar target: the Federal Reserve and its chairman, Jerome Powell. The narrative is clear and forceful: Trump demands immediate cuts in interest rates, arguing that the Fed is stifling the U.S. economy without justification. This pressure, while not a direct order, highlights a concerning dynamic for the independence of the world's most powerful monetary institution. What may have previously been viewed as a political spectacle or entertainment now feels more like an economic horror story with global repercussions.
Trump's Premise: "There Is No Inflation and Europe Has Already Cut"
In his recent public statements, Trump has been unequivocal. "There is no inflation anymore," he asserts, dismissing the main concern that has kept the Fed in a cycle of high rates. His argument is reinforced by the international comparison: "Europe has already implemented 10 rate cuts," he points out, while the United States, under Powell's direction, remains steadfast. This dichotomy, according to Trump, is costing the country dearly in terms of debt and competitiveness.
What underlies these claims is a clear directive: the Fed must act, and it must do so now, as it sees fit. "If inflation were to return, the Fed can simply raise rates again," he suggests, simplifying the complexity of monetary policy. His words are not just opinions; they are a blatant attempt to pressure, direct, and urge an independent entity to act according to his will, "because it is he who is speaking."
"Everyone Against Powell": Presidential Influence in Action
The independence of the Federal Reserve is a fundamental pillar for economic stability, designed to isolate monetary decisions from political fluctuations. However, the voice of the President of the United States, even without legal power to dictate Fed policy, carries colossal weight.
When Donald Trump, the current leader of the world's largest economy, openly criticizes Jerome Powell and the Fed, he is not just expressing a personal opinion. He mobilizes expectations, influences market perception, and, crucially, validates and amplifies the voices of other sectors that also seek a change in rate policy. Politicians, investors, and entrepreneurs who agree with his vision find a powerful ally in the Oval Office, creating an atmosphere of "Everyone Against Powell" or "All Power Against Powell."
This pressure is not a mere suggestion; it is a public strategy to steer the agenda and force a hand, creating an environment where the "will of the President" is perceived as the "will of the people" or, at least, of a significant power, evidencing a clear intention to manipulate perception and, therefore, the market.
The Trillion-Dollar Debt: A Troubling Backdrop and the Fragmenting Country
But there is an even deeper layer to this discussion, and it is here where the "show" turns into a "horror story." Why is the country that prides itself on being the richest in the world, the icon of productivity and prosperity, accumulating debt that totals trillions of dollars? The answer is complex and has evolved over decades. The United States has incurred massive spending, largely financed by debt, driven by wars, economic recessions that required stimulus, tax cuts that were not offset by revenue, and the expansion of social and defense programs. Fiscal discipline has been a rarity in Washington, with both parties contributing to the problem.
The country that should be an example of producing goods and services to cover its economic, social, and cultural deficiencies is not achieving this to the necessary extent. Deindustrialization, dependence on services, complexities of global supply chains, and a lack of consistent investment in key infrastructure, education, and cutting-edge technology have eroded its real productive capacity.
What is evident in this struggle between the President and the Fed is a complete lack of coordination and focus on addressing imminent problems. While interest rates are discussed and pressured — a key piece of the economic machinery, yes, but not the only one — the big "cake" called the United States, with its structural debt problems, obsolete infrastructure, social polarization, production challenges, and a growing economic gap, seems to be fragmenting, sinking, and rotting little by little. The "crumbs" that are fought over in the interest rate debate are a distraction or, worse yet, a smokescreen against the urgent need to address a much deeper and systemic fiscal and productive crisis. Politics is so caught up in its internal struggles and media distraction that it is sinking the economy and diverting attention from other sectors, to the detriment of ordinary citizens in the U.S. and, by extension, the world.
Global Repercussions: When Domestic Issues Become International
The magnitude of U.S. debt and internal political instability do not stay within its borders. The U.S. dollar remains the world's primary reserve currency and the basis for much of international trade. Any sign of economic weakness or political dysfunction in the U.S. generates global uncertainty, affecting foreign exchange markets, investment flows, and business confidence worldwide.
Multinational companies, banks, and governments around the world watch nervously as the "brawls for crumbs" in Washington intensify, knowing that the decisions or inaction of the U.S. can destabilize their own economies. In particular, emerging economies are highly vulnerable to changes in Fed policy or to the perception of risk in the U.S., facing capital flight or increased debt costs.
The Impact on the Market and Cryptocurrencies
The impending Fed meeting on June 18, where most analysts expect rates to remain stable (97.5% according to CME FedWatch), becomes a high-tension scenario. However, Trump's pressure could tip the balance.
If the Fed were to yield to this pressure and opt for a "sooner than expected" rate cut, the cryptocurrency market would be, according to experts like Carlo Pruscino from CMC Markets, one of the first and fastest to react. An accelerated cut would drive risk appetite and liquidity, directly benefiting Bitcoin and other altcoins, highlighting how, in this macabre economic horror show, certain sectors seek to capitalize on instability.
The situation is a palpable reminder of how politics and economics are intrinsically linked, and how an authoritative voice like President Trump's can challenge the foundations of institutional independence in pursuit of a specific economic agenda, while the country grapples with fundamental financial challenges that seem to be ignored in the heat of battle. The show has shifted from entertainment to becoming a horror story from which no one knows how to escape.
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