Trump's recent moves are clearly a final ultimatum to the Federal Reserve. Here are three key points of this power play:
1. Palace Coup Drama: The Open Conspiracy of Supporting and Undermining Leadership
Trump announced on Air Force One that "a new chairman will be in place soon," which on the surface appears to be a personnel adjustment, but in reality is a public execution of Powell. This tactic of "shaking the mountain to scare the tiger" is played smoothly:
Public Opinion Manipulation: For three consecutive days, he blasted Powell on Twitter, calling him "Mr. Too Late," blaming him for the soaring U.S. debtLegal Provocation: Knowing that the president has no authority to dismiss the Federal Reserve chairman, he intentionally hinted that "successors are being considered"Market Intimidation: On June 6, the day of his remarks, U.S. stocks experienced wild fluctuations, with the Dow Jones dropping 300 points in half an hour.
2. Puppet on a String: Kevin Walsh’s Double Life
Walsh, who was named, is not a good-natured person; he carries three dangerous labels:
The Youngest Federal Reserve Governor in History: Jumping into the central bank at 36, he experienced the 2008 financial crisisTrump's Loyalist: A core member of the transition team for the 2024 election, involved in formulating "America First" financial policiesCentral Bank Disruptor: He openly claimed that "the Federal Reserve should cut its workforce by 30%" and advocated abolishing the 2% inflation target. Even more frightening, he just published an article in the Wall Street Journal in May supporting presidential intervention in monetary policy, effectively dismantling the central bank's firewall. If he takes office, the Federal Reserve might as well be renamed "Trump Reserve."
3. Nuclear Countdown: Three Deadly Chain Reactions
Signs of Dollar Hegemony Collapse: The president of the St. Louis Federal Reserve warned on June 6 that political interference would render interest rate cuts ineffectiveDebt Powder Keg Ignition: The U.S. government's daily interest expenditure exceeds $2 billion; a 1% rate cut could save $48 billion/year—but all that money ends up in the pockets of arms dealersGlobal Financial Mass Exodus: As soon as the news broke, gold instantly surpassed $2500, and the offshore RMB exchange rate plummeted by 500 basis points. The most ironic part is that Powell had just been snubbed by Trump on May 29, stubbornly claiming to "adhere to independent decision-making," only to turn around and be grilled. This is not a monetary policy struggle; it is essentially a coup prepared by Trump for his re-election.
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