Recently, the "clash of titans" between the Federal Reserve and the Treasury has become increasingly exciting. As a bystander, let me chat with you about this matter.

On May 15, Powell mentioned in a meeting that they want to adjust the policy framework. This sounds quite official, right? But upon closer inspection, you'll find that there's a power struggle between the Federal Reserve and the Treasury behind this. During the pandemic, the massive monetary stimulus was great, but now managing the beast of inflation is quite a challenge.

Take a look at the latest data: prices are still rising steadily, and the CPI has exceeded expectations for three consecutive months. Powell is saying "don’t rush," but the market has already lost its patience—earlier this year, everyone hoped for six rate cuts this year, and now two cuts would be considered good.

On the Treasury side, Yellen is daily calling for a "soft landing," but just look at that $34 trillion in national debt, with daily interest costs burning through $10 billion! Anyone in the position of Treasury Secretary would be anxious. But the question is, can the Federal Reserve casually cut rates?

This situation has actually been foreshadowed. When Silicon Valley Bank had its issues last year, the Treasury was in a hurry to put out the fire, while the Federal Reserve was secretly tightening the taps. Now both sides are at odds over monetary policy, one wanting to step on the gas, and the other wanting to hit the brakes.

The ones suffering the most are us common folks. Right now, borrowing money is painfully expensive, mortgage rates are at 7%, and the prices of eggs and milk in supermarkets are rising daily. The Trump administration wanted to lower rates to please voters, but the Federal Reserve is hesitant to go soft on inflation.

To be honest, this game may not have a winner in the end. Continuing to raise rates could crush businesses, while cutting rates prematurely might trigger inflation to rebound. The Federal Reserve is currently just buying time, but the longer it drags on, the bigger the problem gets.

What do you think will be the outcome in the end? Will the Federal Reserve concede or will the Treasury give in? Let's discuss your views~ By the way, if you think what I said makes some sense, feel free to follow me for more exchanges in the future!