Powell's sudden shift to dovish stance, Trump's political pressure begins to show?

Recently, the financial world has been buzzing with a piece of news! According to Golden Ten Data, GF Macro Research pointed out that Powell's dovish turn at the Jackson Hole meeting was uncharacteristic, completely different from his statement at the July FOMC press conference. His views on the labor market have taken a 180-degree turn, and he has begun to worry about the downside risks of employment. This change inevitably makes people wonder if Trump's political pressure on the Federal Reserve has played a role?

Trump has always hoped that the Federal Reserve would cut interest rates, and even planned to replace the Federal Reserve Chairman to promote this goal. The Kobeissi Letter analysis said that Trump hopes that the Federal Reserve will cut interest rates by 300 basis points. Although it is not expected to be so radical, the intention behind it is very obvious. Global central banks launched the largest interest rate cut wave of this century in May this year, with a total of 15 interest rate cuts. The market expects the Federal Reserve to cut interest rates for the first time in a month. Trump also said that he will announce the new Federal Reserve Chairman candidate soon and asked him to cut interest rates.

Looking at Powell's speech at the Jackson Hole meeting this time, although the Fed's expectations for interest rate cuts in 2025 are still maintained at 2 times, the dovish signal he released has greatly strengthened the possibility of a 25bp interest rate cut in September and continuous interest rate cuts within the year. However, loose monetary policy also has side effects. It may be more difficult to control the future inflation dynamics in the United States. The accelerated economic growth after the interest rate cut may face a higher inflation center. It may be true that this year will be more "stagnant" and next year will be more "inflationary".

The game of the Fed's monetary policy direction is backed by complex economic situation and political pressure. Whether Trump's political calculations will come true and how Powell's dovish stance will affect the US economy, the market is watching!$ETH $BTC $SOL