After Trump announced his victory in the election, the Federal Reserve cut interest rates by 25 basis points as expected, but deleted the statement in its policy statement that it was more confident that inflation would continue to move toward its 2% target, which was seen as a challenge to Trump's policies.
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Trump wants to lower interest rates to promote economic growth, while the Federal Reserve is concerned about inflation risks and is therefore cautious about cutting interest rates.
The Fed’s stance caused the market’s expectations for rate cuts to plummet, the U.S. dollar index fell first and then rose, other currencies hit new lows against the U.S. dollar, and the renminbi also showed a brief downward reversal signal.
The "war" between Trump and the Fed is actually a contest over US economic policies. Trump hopes to stimulate the economy by cutting interest rates, while the Fed is more concerned about long-term inflation risks. Fed Chairman Powell made it clear that he would not resign at Trump's request, demonstrating the independence of the Fed.
From the perspective of international relations, the Fed's policies not only affect the United States, but also have a profound impact on the global economy. As the world's main reserve currency, the changes in the US dollar's monetary policy affect the nerves of the global financial market.
Some analysts believe the Fed's independence is key to its success and should not be influenced by politics, while others believe the central bank should focus more on the president's policy goals to promote economic growth.
I believe that the independence of the Federal Reserve is its
The Fed is an important guarantee for maintaining economic stability. However, the Fed's policy decisions should also take into account political realities and seek a balance.
Conclusion
The battle between Trump and the Federal Reserve not only affects the US economy, but also the global financial market. In the future, the interaction between the two will determine the direction of the US dollar and the global economy.
