"Fed Mouthpiece": Federal Reserve's Independence Faces Renewed Challenges, No Rate Cut Expected This Month

According to a report by Jinse Finance, Treasury Secretary Bessent and several economic advisors generally advocate for maintaining the Federal Reserve’s independence. For example, in a recent Fox Business interview, Bessent declined to criticize Trump regarding the renovation of the building. However, other advisors and external allies have been exploring legal avenues to remove Powell from his position since before the election. In his testimony last month, Powell stated, “No one wants to undertake a major renovation of a historic building during their term, let alone two historic buildings that require extensive repairs.” Previously, Trump had pushed more broadly for lower interest rates to reduce government borrowing costs. The Federal Reserve is not expected to cut rates at its meeting later this month, but Powell has indicated that if inflation performs well or the labor market weakens, a rate cut may occur later this year. Trump hopes to lower the cost of servicing the federal deficit, though his tax cuts could further expand the federal deficit. Except in extreme situations such as war, central banks in developed economies tend to resist such pressure. They believe that maintaining stable inflation is crucial for sustaining confidence in their national currency.