Trump: “Too Late, Cut Bigger!”
The Fed cut interest rates by 25 basis points, but Donald Trump considered the move too small. He urged a larger and faster cut, saying a large cut could boost the housing market. Trump's tough tone added political pressure amid cautious signals from Jerome Powell, who called the decision “risk management” due to a weakening job market.
Tensions were growing within the board. Stephen Miran—a newly appointed economist close to the Trump camp—was the only dissenting voice, favoring a 50 basis point cut. Powell emphasized that there was no broad support for such a large move, indicating that the majority of policymakers remained calculating and data-driven.
Meanwhile, political dynamics clouded the central bank's independence. A legal dispute involving Governor Lisa Cook and a push to reshuffle the board's composition raised concerns about intervention. These issues have the potential to amplify policy noise and add volatility to market expectations regarding the future path of interest rates.
For the market, this tug-of-war means the next direction will be determined by inflation and employment data, as well as the Fed's language at its upcoming meeting. If political pressure increases while the data doesn't support aggressive easing, the gap between expectations and reality could widen—driving fluctuations in the dollar, bonds, gold, and housing sectors. (ads)
Source: Newsmaker.id
