The flames of war rise again! The president oversteps and pressures the Federal Reserve
On the eve of the Federal Reserve's June interest rate decision, during a crucial silent period, President Trump once again launched an attack on Twitter, directly criticizing Chairman Powell.
Trump linked the Federal Reserve's work to its trade policy, stating that the $88 billion tariffs imposed by the U.S. did not trigger inflation, and based on this, he again urged the Federal Reserve to 'quickly cut interest rates.' He even proposed a radical plan: 'First, make a particularly large short-term rate cut,' and angrily called Powell 'a stupid person,' asserting that 'there may not be a rate cut today.'
This aggressive tweet quickly spread in Washington, forcing the Federal Reserve, which should have focused on decision-making, to divert its attention. Even more shocking to the market was the specific 'prescription' proposed by Trump—demanding an immediate rate cut of 200 to 250 basis points, far exceeding the usual range of rate cuts by seven to eight times.
Trump's comments were not just venting frustration. He claimed that 'after the rate cut, one can buy U.S. Treasury bonds cheaply,' which has crossed the line of interfering with the independent operations of the Federal Reserve in managing its balance sheet, blurring the boundaries between government borrowing and central bank adjustments to the money supply.
Since Powell took office in 2018, Trump has increasingly and vehemently attacked the Federal Reserve on Twitter, escalating from subtle pressure to outright interference, even threatening the right to 'demote or fire' Powell. This insult coupled with astronomical demands for rate cuts has once again severely impacted the independence of the central bank.
In the end, the Federal Reserve withstood the pressure and announced that it would maintain interest rates. When the president openly pressures while disregarding rules, and the central bank responds with silence and professional judgment, the red line between government power and the independence of the central bank in the U.S. economic management system once again becomes a focal point of controversy.
Follow me, and I will take you through the phenomenon to see the essence, together we will traverse the bull and bear markets
Intra-day focus: SPK ETH BTC BCH
