It is simply impossible for the U.S. to continue; their good days will soon come to an end! Since Trump and Biden took office, the issue of firing Powell has been discussed almost every week. The public opinion on our side almost unanimously believes that Trump is a reckless person who will definitely manage to get Powell fired.
From a deeper perspective, is Powell important? Not really; the independence of the Federal Reserve is crucial. If Trump can casually dismiss Powell based on personal preference, it would mean that the independence of the Federal Reserve would be completely lost. If the independence of the Federal Reserve is completely lost, it would be a devastating blow to the global economy.
Thus, a new ruling from the U.S. Supreme Court yesterday is very, very important, drawing a clear red line on this matter. Based on this ruling, Powell may be safe until the end of his term. The independence of Federal Reserve members has once again been reinforced at the judicial level.
This case does not directly involve the Federal Reserve, but revolves around the two members of independent federal agencies that Trump previously dismissed, namely Wilcocus from the National Labor Relations Board and Harris from the Federal Protective Service. When these two filed a countersuit, they claimed to have job protection similar to that of a Federal Reserve board member and should not be dismissed at the president's whim.
In this trial, because the Supreme Court did not outright deny the right to dismiss by the president, on the contrary, it explicitly stated in the ruling that the president can dismiss most executive officials, but the Federal Reserve is an exception, which was clearly stated in the ruling. The justices noted that the Federal Reserve is a uniquely structured quasi-private entity that inherits the unique historical traditions of the First and Second Banks.
Behind this statement hides a very important matter, which is that the Federal Reserve does not entirely belong to the federal government's executive system, but is an independent financial authority. Therefore, if Trump stubbornly wants to fire Powell, he will face two major obstacles.
The first is the court system's veto. The Supreme Court has sent a strong signal through this case that any action against the Federal Reserve requires an extremely high threshold.
The second is the market reaction. The Federal Reserve is the pricing anchor of the global financial system; if the chairperson frequently changes or is politically interfered with, it will be the first to suffer immense impact.
So, from now on, regardless of how strong a figure the Federal Reserve encounters, even someone as strong as Trump cannot shake its independence.
Another interesting thing is that for nearly the last 100 years, power in the U.S. has been very decentralized; everyone is very dark-hearted, acting in their own interests, playing games for money, with dogs biting dogs in a chaotic manner every day. However, interestingly, because it is decentralized, it seems that their economy is getting better and better, and their leading position and structural advantages are becoming stronger.
This is absurd, how can it be so decentralized? Shouldn't it be centralized? So from this logical perspective, it is impossible for things over there in the U.S. to continue; their good days will soon come to an end.
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