Trump Administration Faces Internal Debate Over Federal Reserve Independence

According to PANews, a dispute over building renovations has emboldened a faction within U.S. President Donald Trump's administration that has long sought to challenge the Federal Reserve's independence. Treasury Secretary Besent and several economic advisors generally advocate for maintaining the Fed's autonomy. For instance, Besent refrained from criticizing Trump over the renovation issue during a recent Fox Business interview. However, other advisors and external allies have been exploring legal avenues to remove Powell from his position since before the election. Powell stated last month that no one wants to undertake major renovations of a historic building during their term, let alone two buildings requiring significant repairs. Previously, Trump pushed for broader interest rate cuts to reduce government borrowing costs. While the Federal Reserve is not expected to cut rates at its meeting later this month, Powell has hinted that a rate cut might occur later this year if inflation performs well or the labor market weakens. Trump aims to lower the cost of servicing the federal deficit, which his tax cuts might expand. However, outside of extreme situations like war, central banks in developed economies resist such pressure, believing that stable inflation is crucial for maintaining confidence in their currency.