Intervention has begun? Trump's chief economic advisor will meet with Powell regularly
The relationship between the Trump administration and the Federal Reserve is in a delicate balance. Regular meetings provide a communication channel for both parties, but potential conflicts still exist under inflationary pressures and policy differences
As inflationary pressures continue in the United States, the relationship between the Trump administration and the Federal Reserve has once again become a focal point.
On Sunday local time, Kevin Hassett, director of the White House National Economic Council, revealed in an interview that he would meet regularly with Federal Reserve Chairman Jerome Powell to discuss the U.S. economic situation and provide a channel for conveying the president's opinions. This practice has raised concerns about the independence of the Federal Reserve.
Hassett stated that this approach is a return to the practices of Trump's first term and will not infringe upon the independence of the Federal Reserve. He emphasized:
Powell is an independent person, and the independence of the Federal Reserve is respected. The key is that the president's opinions should also be heard.
We will discuss views on the current situation and listen to his opinions.
The relationship between the Trump administration and the Federal Reserve is in a delicate balance. Regular meetings provide a communication channel for both parties, but potential conflicts still exist under inflationary pressures and policy differences.
As January CPI exceeds expectations, the divergence between the Trump administration and the Federal Reserve may intensify. Noted economist Nouriel Roubini warned that even if the Federal Reserve merely delays interest rate cuts, it could lead to a "direct confrontation" with Trump.
Trump recently called for the Federal Reserve to cut interest rates again, believing it would align with his tariff policies. However, Powell reiterated last week during Congressional hearings that the Federal Reserve is not in a hurry to cut rates and will maintain a restrictive policy stance.
Wall Street is skeptical of Trump's policy agenda. Roubini warned that the policies proposed by the Trump administration, including tariffs, could exacerbate current inflationary pressures. Moody's chief economist Mark Zandi also warned that consumers would "bear the burden."
David Kostin, chief U.S. equity strategist at Goldman Sachs, stated that tariffs are a key downside risk to U.S. stock earnings growth. He estimates that every 5% increase in U.S. tariff rates could reduce the earnings expectations for the S&P 500 index by about 1% to 2% by 2025