Trump publicly stated that the next Federal Reserve chairman must immediately cut interest rates, a statement that has heightened concerns about his intervention in the central bank's independence. In an interview, he said he would only nominate someone who supports rapid rate cuts, while there is already significant division within the Federal Reserve about the policy path for next year. Although Powell's term ends in May of next year, Trump's early pressure has raised alarms among markets and experts, who believe it could damage the Fed's global credibility and disrupt expectations management.
At the same time, the Federal Reserve cut interest rates again after today's FOMC meeting, in line with market expectations. However, internal divisions highlight the uncertainty of future paths. The Fed lowered rates by 25 basis points for the third consecutive time to a range of 3.5% to 3.75%, a controversial decision that exposed deep divisions within the decision-making body on how to address rising unemployment and persistent inflation. Several officials expressed opposing views: the Fed board member Mila, appointed by Trump, has repeatedly called for a more aggressive half-point rate cut, while the presidents of the Kansas City and Chicago Fed have advocated for inaction. This rift is rare during Powell's tenure and makes it even harder for him to maintain policy consistency under continuous external pressure. Powell stated that the current environment is complex, and both pausing or continuing rate cuts have their justifications, emphasizing that this was a "difficult judgment" and reminding the Fed that it has only one tool and cannot meet all policy objectives simultaneously.
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Original article: toutiao.com/article/1851185434907723/
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