On July 12, CoinWorld reported that the renovation dispute has emboldened a faction within the Trump administration that has long sought to challenge the independence of the Federal Reserve. Some economic advisors, including Secretary of the Treasury Mnuchin, generally advocate for maintaining the independence of the Federal Reserve. For instance, Mnuchin recently declined to criticize Trump regarding the building renovations during a Fox Business interview. However, other advisors and external allies have been exploring legal avenues to remove Powell from office since before the election. Powell stated in his testimony last month, 'During my term, no one wants to undertake significant renovations on a historic building, let alone two historic buildings that require substantial repairs.'
Previously, Trump has pushed for lower interest rates on a larger scale to reduce government borrowing costs. The Federal Reserve is expected not to lower interest rates at its meeting later this month, but Powell has already hinted that if inflation performs well or the labor market weakens, a rate cut may occur later this year. Trump hopes to reduce the debt servicing costs of the federal deficit, while his tax cuts may widen the federal deficit. However, beyond extreme situations like war, central banks in developed economies will resist such pressures. They believe that stabilizing inflation is crucial for maintaining public confidence in their national currency.