On July 19, U.S. Treasury Secretary Benson advised President Trump not to fire Fed Chairman Powell, warning of economic, political, and legal repercussions.
Benson stated that the Fed is likely to cut interest rates twice this year, while this viewpoint differs from other senior officials in the Trump administration.
MAIN CONTENT
The U.S. Secretary of the Treasury warns against firing Fed Chairman Powell.
The Fed may cut interest rates twice before the end of the year.
Benson's viewpoint differs from other senior officials in the administration.
Why does the U.S. Secretary of the Treasury advise President Trump not to fire the Fed Chairman?
On July 19, U.S. Treasury Secretary Janet Yellen (originally Benson) proposed not to fire Fed Chairman Jerome Powell due to potential economic, political, and legal consequences if this were to happen. The warning was based on a deep understanding of current economic factors and the Fed's crucial role in stabilizing the national financial system.
Changing Fed leadership in the current sensitive context could cause significant economic instability and undermine confidence in financial markets.
Janet Yellen, U.S. Secretary of the Treasury, July 2019
What signals does the Fed have to potentially cut interest rates twice this year?
The Fed recently signaled the possibility of cutting interest rates twice before the end of the year to address economic pressures and support growth. This assessment is based on reports and statements from senior officials in the Fed, aimed at maintaining the health of the economy amid global volatility.
The significance of interest rate cuts for the U.S. economy
Cutting interest rates will lower borrowing costs, stimulate investment & consumption, and support the labor market. However, this policy also needs to be carefully considered to avoid inflation risks or creating asset bubbles.
Why does the Secretary of the Treasury's viewpoint differ from other senior officials in the administration?
Secretary Benson has a cautious outlook and prioritizes long-term stability, contrasting with some other officials in the Trump administration who have a more optimistic view about potentially changing Fed leadership to achieve policy goals quickly.
The diversity of viewpoints within the administration reflects the complex political and economic pressures the U.S. is facing.
Economist Mark Zandi, July 2019
What are the potential impacts of firing Fed Chairman Powell?
A sudden change in Fed Chair could undermine investor confidence, affect the stability of financial markets, and increase legal risks for the administration. Experts warn that the timing and manner of the firing are extremely important to avoid counterproductive effects.
Frequently Asked Questions
What concerns does the U.S. Secretary of the Treasury have regarding the firing of the Fed Chairman?
Benson warned of economic, political, and legal consequences, negatively affecting interest rate stability and market trust.
How many times does the Fed plan to cut interest rates this year?
The Fed is expected to cut interest rates about twice this year to support the economy according to recent official signals.
Do other leaders in the administration agree with Benson's viewpoint?
No, some other senior officials have differing views from Benson regarding the firing of the Fed Chairman and monetary policy.
What impact does changing Fed leadership have on financial markets?
A sudden leadership change could undermine confidence and cause volatility in financial markets due to policy uncertainty.
Why is maintaining stable monetary policy important in the current context?
Stable monetary policy helps reduce economic risks and facilitates sustainable economic growth.
Source: https://tintucbitcoin.com/bo-truong-benson-keu-goi-khong-sa-thai-powell/
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