2025/05/03 How the US Debt Crisis Affects Global Wealth (Part 2)
Trump vs. Powell: The Deep Crisis of Policy Confrontation
In April 2025, U.S. President Trump publicly criticized Federal Reserve Chairman Powell, stating that his high interest rate policies were strangling the U.S. economy. Trump is eager for interest rate cuts to reduce national debt interest expenses, stimulate the stock market, and boost employment, but Powell insists that the Fed's mission is to curb inflation and maintain financial stability. Premature interest rate cuts could reignite inflation, which would be a greater disaster for the American public.
Behind this confrontation lies extreme uncertainty in policy direction. The market begins to question: who truly controls the lifeblood of the U.S. economy? Furthermore, media reports reveal that Trump's team is exploring the possibility of prematurely removing Powell. If the U.S. president were to directly intervene in the Fed's independence, global investors' confidence in U.S. debt would suffer a nuclear-level blow.
The foundation of dollar hegemony is quietly eroding
The reason the dollar has long dominated the global financial system relies on three major trump cards: U.S. military power and geopolitical hegemony, the global monopoly position of the dollar settlement system, and the independence and financial stability of the Federal Reserve.
With the rise of geopolitical rivals, China is promoting oil transactions in yuan, and after Russia was kicked out of SWIFT, the world is beginning to think about how to respond to potential sanctions. The independence of the Fed is also being publicly questioned by the White House. These signs indicate that the world is quietly preparing for 'de-dollarization'. Data shows that the proportion of dollars in global central bank foreign exchange reserves has fallen from 71% in 2000 to 58.4% at the end of 2024, marking a 25-year low. The destabilization of dollar hegemony could trigger a chain reaction in the global financial system.
#Market analysis for reference only #Not investment advice
