Trump's loss in monetary policy decisions
In a move aimed at boosting investments and stabilising the economy, the US Federal Reserve (Fed) has announced a quarter-point reduction in the key interest rate. The decision was made by the current chairman of the Fed's executive committee, Jerome Powell, who has previously rejected President Trump's policies.
However, the Fed's actions come amidst a power struggle over the central bank, with Trump attempting to influence Powell. The president has been trying to remove Fed Governor Lisa Cook, alleging mortgage fraud, in an effort to break the Fed majority with more cronies. This battle is far from over, as Trump has failed in court so far.
The move by the Fed is a response to the ongoing economic challenges, with most experts warning of a possible collapse of the world's largest economy due to high debt and the ongoing trade dispute. The US labor market is struggling, partly due to Trump's trade policies.
Financial markets in countries like Turkey, Venezuela, and Argentina have been on a razor's edge due to meddling with bone-dry monetary policy, also known as printing money. Such meddling has led to hyperinflation for consumers and economic crises in these countries. The Fed is trying to avoid a similar fate by lowering interest rates.
However, the question of how much and how quickly the Fed should cut interest rates has been a contentious issue. Stephen Moore, recently installed by Trump, proposed a more aggressive interest rate cut of 3 percentage points. But his first vote in the relevant Fed committee was lost.
Experts believe that cheap money would temporarily stimulate companies but exacerbate inflation in the long run. The Fed is walking a fine line, trying to strike a balance between stimulating growth and maintaining price stability.
It's important to note that the Fed's role is to maintain stable prices and promote maximum employment. If Trump gained control of the Fed, global financial turmoil could occur, according to many experts.
This news was reported by an independent, left-wing, and opinionated daily newspaper that has been publishing since 1979. The newspaper has been closely following the developments at the Fed and the impact of Trump's policies on the US economy.
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