Since January 2025, former President Donald Trump has publicly demanded Federal Reserve Chair Jerome Powell cut interest rates **at least 17 times**—accusing him of being "very dumb, hardheaded" and urging Congress to "rein him in." Trump argues:

- "Inflation is dead" and the economy is strong;

- Rate cuts would reduce U.S. debt costs;

- Delays make Powell "Mr. Too Late."

Yet the Fed remains unmoved. Here’s why:

🔥 1. Inflation: The Unfinished Battle

While U.S. inflation has cooled from its 2022 peak, **core CPI remains at 3.5%**—far above the Fed’s 2% target. Recent policies exacerbate risks:

- Trump’s 10% global tariffs could spike import prices;

- Premature cuts might reignite inflation, forcing abrupt rate hikes later.

The Fed’s credibility hinges on anchoring inflation expectations. A misstep could trigger a wage-price spiral.

⚖️ 2. Economic Paradox: Strength vs. Fragility

Data paints a contradictory picture:

| **Resilience** | **Weak Spots** |

| Consumer spending robust | Job growth slowing |

| Stock markets near highs | Business investment weak|

| Service-sector inflation sticky | Manufacturing soft |

With no clear recession signal, the Fed prioritizes **data certainty** over political urgency.

**3. Institutional Independence: The Fed’s Red Line**

**Political interference** threatens the Fed’s legitimacy. If rate cuts appear coerced:

- Markets may doubt policy integrity → U.S. Treasury yields surge;

- Global confidence in the **dollar’s reserve status** could erode;

- Capital flight from dollar assets might accelerate.

History shows: When the Fed bends to politics (e.g., 1970s), stagflation follows.

🌍 **4. Global Domino Effect**

A hasty U.S. rate cut could:

- Destabilize currencies (e.g., force emergency hikes in emerging markets);

- Fuel asset bubbles worldwide;

- Undermine the dollar’s "safe haven" role amid geopolitical risks.

💎 **The Bottom Line**

The Fed’s restraint isn’t stubbornness—it’s a defense of **monetary policy sovereignty**. Powell’s team must balance incomplete inflation control against economic cracks while shielding the institution from politicization. Until data decisively warrants easing, rates will stay higher for longer.

For markets, patience is the price of stability.

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