Overview

• President Trump has intensified his public campaign urging the Federal Reserve to cut short-term interest rates, reiterating criticisms of Chair Jerome Powell's decisions.
• The White House is reportedly exploring legal avenues to remove Powell, raising concerns about the Fed's independence and its ability to make data-driven decisions free from political influence.
• Economists warn that Trump's tariff policies and attacks on the Fed could push long-term borrowing costs higher, even if the central bank lowers its benchmark rate.
• Markets have reacted negatively to perceived threats to the Fed's autonomy, with stock indexes falling, Treasury yields climbing, and the dollar weakening in recent days.
• Fed Chair Powell has emphasized the need to evaluate the economic impacts of tariffs and inflationary pressures before considering rate adjustments, maintaining a cautious stance.