Trump’s interest rate reduction in the U.S. Federal Reserve, even “unable to get rid of” Fed Chairman Cook, has managed to integrate his confidence Stephen Milan. The current Chairman of the White House Economic Advisory Committee, who was nominated by the Senate on September 15 with a weak advantage of 48 against 47, officially entered the Federal Reserve as Chairman. Before that, Trump had tried to remove Cook from office, but was unwilling because of the other party’s lawsuit to temporarily stay in office. But in any case, Milan’s entry gave Trump a more critical vote in the U.S. Federal Reserve, and also made the market’s expectations for a rate reduction instantaneously warmed – after Trump had complained about the current Federal Reserve Chairman Powell, the intention of
With the recent meeting of the Federal Reserve, the general speculation is that interest rate cuts are on the rope, and the rate is likely to be reduced by 25 basis points first. Trump's persistence in interest rate cuts is almost paranoid, and he even thinks that the next year or two will need to be reduced several times, rather than a round or two of a slump. Behind this urgency, there are both considerations to boost the U.S. economy and more hidden political calculations. And as Trump continues to insert confidence in the U.S. Federal Reserve, gradually eliminate the alien, Powell's risk of being empty is also increasing, and the possibility of the U.S. to successfully reduce interest rates is continuously climbing.
If the U.S. Federal Reserve really starts to reduce interest rates, it will have a double impact on our economy and the stock market. From a positive point of view, the interest rate will expand global capital liquidity, and more vacant funds on the market may flow into our market, bringing upward momentum for A-shares; at the same time, the dollar will probably weaken, and the yuan against the dollar will be valued slightly, which will help to enhance the international purchasing power of the yuan and increase our settlement position in global trade. But the challenge is also present: the rise in the yuan will weaken the price advantage of our export goods, and U.S. consumers will increase the cost of purchasing our goods, and may reduce orders, and cause some pressure on export trade.
This “power game” around the Federal Reserve is essentially Trump’s attempt to intervene in monetary policy with political force. Though the Federal Reserve has always emphasized independence, under Trump’s ongoing “stretching legs into” it still needs to be questioned whether its decisions will deviate from the economic laws. And for our country, regardless of whether the United States continues to lower interest rates, we need to respond in advance: on the one hand, seize capital flow into opportunities, activate market vitality; on the other hand, optimize export structures, reduce the impact of exchange rate fluctuations, and respond to the changes in the global economic landscape with a more stable attitude.
Give quality content to share