1. Focus on rate cuts: 85% probability of a 25 basis point cut, low likelihood for 50 basis points.
As the countdown to the September rate cut begins, Powell will clarify the specific path tonight. The current market broadly expects an 85% probability of a 25 basis point cut; regarding the 50 basis point cut mentioned by Bessenet, the market sees it as more likely a 'gimmick'. Cryptocurrency investors need to remain rational and avoid being misled by short-term market sentiments.
2. Sudden personnel changes: Trump overnight dismisses Federal Reserve board member Cook.
In the early hours of the 26th, Trump suddenly announced the dismissal of Federal Reserve board member Cook, and this decision took immediate effect. This action is backed by multiple logics:
Reason for dismissal: Trump claims Cook made 'false statements' regarding mortgages (filing in two locations for primary residences), questioning her personal integrity, and based on the Constitution and the Federal Reserve Act, he removed her from office.
Core reason: Contradictory policy positions. Cook has a special identity as the first Black woman on the Federal Reserve board, having served as an economic advisor during the Obama administration. Nominated by Biden in 2022, her term was originally set to last until 2038. She leans toward 'hawkish' policies, opposing Trump's trade policies and advocating for interest rate hikes to curb inflation, which directly conflicts with Trump's push for rate cuts, becoming an obstacle to his agenda.
3. Power struggle at the Federal Reserve: Trump's intention is to control the discourse on monetary policy.
The Federal Reserve's board of seven is the core decision-making body, with members directly involved in setting interest rates, implementing quantitative easing policies, and financial regulation. Cook's vote has a direct impact on policy direction. Trump's intentions are very clear:
After dismissing Cook, the vacant position on the board can be filled, allowing for the installation of loyalists, paving the way for pushing rate cuts (especially to achieve cuts before the 2024 elections).
Trump has now nominated several loyalists. If this dismissal is successfully followed by appointments, his camp could occupy four of the seven board seats by early next year, thereby completely controlling the monetary policy decision-making power of the Federal Reserve.
4. Deep risk: The independence of the Federal Reserve is under threat, affecting global financial stability.
The 'political independence' of the Federal Reserve is the cornerstone of stability in the U.S. financial system. Trump's action is essentially testing the boundaries of 'political interference in the central bank'—using 'legal reasons' as an excuse to execute a 'personnel purge', attempting to transform the Federal Reserve from an 'independent institution' into a 'tool serving White House policies'.
As a Democratic nominee and a board member with 'opposing views', Cook has become the first target in this power struggle. This issue is not merely about individual job security; it is closely related to the future independence of the Federal Reserve and may even shake the stability of the global financial order. High-risk markets, such as cryptocurrencies, need to be highly vigilant about potential chain reactions that may follow.
