The Escalation of the White House and Federal Reserve Game Raises Market Turbulence

The monetary policy game of the Trump administration is intensifying:

Recently, U.S. President Trump has publicly pressured the Federal Reserve to lower interest rates, attempting to boost the economy by taking advantage of the recent decline in food and energy prices. Federal Reserve Chairman Powell insists on the independence of monetary policy and clearly rejects political interference, leading to a continuous escalation of the conflict between the two sides. Trump threatens to use presidential power to replace the Federal Reserve chairman, raising concerns in the legal community about the independence of the central bank.

The economic struggle behind policy differences:

The White House believes that lowering interest rates can offset the impact of the new tariff policy (the "Liberation Day" tax plan scheduled to be implemented next week) on the economy, while the Federal Reserve is concerned that the tariff effects will push up inflation, maintaining current interest rates to stabilize prices. This fundamental policy divergence has led to a dilemma in the direction of U.S. monetary policy.

Financial market risk warnings:

1. The legal feasibility of the president replacing the Federal Reserve chairman is in doubt.

2. Policy uncertainty may trigger significant fluctuations in the stock and bond markets.

3. Global investors' risk-averse sentiment continues to rise.

Powell's strong statement emphasizes that he will stay in position, stressing that "monetary policy decisions are not influenced by political pressure." Economists warn that executive intervention in the independence of the central bank will severely impact the credibility of the dollar, potentially triggering cross-market chain reactions.