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A presidential assault on the Fed\u2019s independence would send crypto into uncharted waters \u2014 and possibly vindicate its original thesis.<\/p>\n
Recent months have seen the ebb and flow of a certain pattern: US President Donald Trump will take some objectively harmful action to the US economy, and the markets will crash. Seeing this, Trump has turned to Jerome Powell, chair of the Federal Reserve, and now demands he lower the Fed Funds Rate \u2014 the rate at which the Fed lends money to banks. And the steely eyed Powell will say \u201cNo.\u201d<\/p>\n
Trump wants to lower rates because doing so is an effective cash injection into the United States economy, stimulating activity and lifting the market. This, he believes, will make him app<\/a>ear successful. Powell wants to follow rigorous economic standards to set rates to carefully balance the Fed\u2019s dual mandates of maximizing employment and maintaining stable prices.\u00a0<\/p>\n He also wants to maintain the Fed\u2019s independence from political pressure and, crucially, maintain the Fed\u2019s appearance <\/em>of independence from political pressure. If the markets believe that the central bank\u2019s independence has failed in the US, it may become more difficult to sell US Treasury Bills, the United States\u2019 sovereign debt. That is a problem in the fundamental sense that the US will have to pay more to borrow money, making it poorer \u2014 but it is an especially acute problem now <\/em>because the US already has <\/em>an enormous, $30-trillion pile of debt which it has to periodically refinance.<\/p>\n Read more<\/p>\n<\/p>\n If you liked the article, do not forget to share it with your friends. Follow us on\u00a0Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n If you want to read more News<\/a> articles, you can visit our General category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n\n