⚖️ The Core Means of Personnel Intervention
Advance Nomination to Pressure the Current Chairman
Trump publicly announced that he would "soon announce the next Federal Reserve Chairman" before Powell's term ended (May 2026) and highly praised the popular candidate, Waller. This move aimed to undermine Powell's authority in advance and force a policy shift towards interest rate cuts. Although Powell stated, "The president cannot fire me," political pressure has substantially interfered with the Federal Reserve's decision-making independence.
Testing the Legal Boundaries: Supreme Court Game
The Trump team pushed for the Supreme Court to review the 1935 case (Humphrey’s Executor v. United States), attempting to abolish the president's restrictions on dismissing officials of independent agencies. If successful, the president could dismiss Federal Reserve governors based on policy disagreements, completely undermining the foundation of central bank independence. The Supreme Court is expected to rule on this case in May 2025.
Installing "Loyalists" into the Board
In June 2025, Michelle Bowman, who advocates for loosening bank regulations, was confirmed by the Senate as the Federal Reserve's Vice Chairman for Supervision. Through personnel changes, Trump gradually controlled key positions, paving the way for future interventions in interest rate decisions.
🎯 Political Motivation: Short-Term Interests and Power Expansion
Shifting Policy Contradictions
Trump's tariff increases raised the risk of economic recession; his demand for "immediate rate cuts of 100 basis points" was actually meant to hedge against the negative effects of tariffs and shift economic contradictions onto the Federal Reserve. If rate cuts were implemented, it could temporarily lower U.S. Treasury bond rates (which had reached an average of 3.36% at the time), alleviating government debt pressure.
Framing Economic Performance for the Election
With the 2026 election approaching, Trump needed to stimulate short-term economic data to gain support. By manipulating the Federal Reserve to maintain ultra-low interest rates, he could create a false sense of prosperity, but this could potentially trigger asset bubbles and inflation rebounds.
Establishing a “Presidential-Central Bank” Co-Governance Mechanism
According to internal documents, Trump allies drafted a proposal requiring the Federal Reserve Chairman to “consult the president before interest rate decisions” and placed Federal Reserve regulations under White House review. This move aimed to turn the president into an “informal member” of the interest rate committee, thoroughly politicizing monetary policy.
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