Trump's 'Interference' in the Federal Reserve: A Challenging 'Power Struggle' for Control

The 'independence' of the Federal Reserve is facing a severe test from the political sphere, as the Trump team attempts to replicate the 'partisan' operation model of the Supreme Court, infiltrating this core financial decision-making institution. This 'palace intrigue' is far from a simple personnel adjustment; it is a deep-seated game concerning the direction of U.S. monetary policy and the foundational independence of the central bank.

From a practical standpoint, Trump's path to 'seizing power' is fraught with obstacles. On one hand, the 'consensus culture' and 'data dependence' tradition developed by the Federal Reserve over decades are not easily shattered. Even though Trump has appointed some members, the internal personnel generally uphold the neutrality of the institution rather than blindly follow executive orders. On the other hand, the decision-making structure of the Federal Reserve makes it difficult to concentrate control; policy approval requires not only the support of the board but also relies on the rotating votes of regional Federal Reserve presidents. Even if a proponent of a single extreme viewpoint (like the nominated Milan) enters the fray, it is challenging to quickly assemble a supporting majority, which institutionally delays the pace of political infiltration.

However, it cannot be ignored that the long-term risks of this game are gradually becoming apparent. The Trump team's emphasis on 'loyalty' and the push for the central bank to comply with the fiscal priorities of the executive branch essentially weaken the Federal Reserve's independence. If the government continues to intervene through personnel appointments and public opinion pressure, even if it cannot fully control the situation in the short term, it may lead to internal divisions within the Federal Reserve and disrupt the previous policy consensus. Once the central bank's decision-making is overly influenced by political considerations, it could undermine market trust in the dollar and U.S. monetary policy, exacerbate inflation volatility, distort financial market pricing, and ultimately impact financial stability in the U.S. and globally.

In the short term, the institutional resilience and traditional inertia of the Federal Reserve can still withstand a 'quick victory' takeover; but in the long term, this tug-of-war over control will continue to fester, and its impact on the independence of the Federal Reserve and the global financial order warrants high vigilance from the market.