Trump and the Federal Reserve: A Battle That Could Cost the American Economy Dearly
August 27, 2025159 ViewsRead Time: 2 minutes
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In an unprecedented scene since the establishment of the American Federal Reserve in 1913, President Donald Trump is waging an open battle against the independence of the central bank, threatening to dismiss its governor, Lisa Cook, in a move that could shake the foundations of the global financial system. This escalation raises a crucial question: What will happen if Trump succeeds in his endeavor?
The "Washington Post" warns of a terrifying scenario: rising borrowing costs, rampant inflation, and a collapse of global investors' confidence in the dollar. Economic analyst Heather Long paints a grim picture of an economy forced to live with artificially low interest rates, which could lead to new real estate bubbles and a debt crisis reminiscent of the 1970s.
The greatest danger lies in the possibility of repeating the "lost decade" experienced by Argentina in the 1980s, where the economy shifts from a state of growth to chronic recession. But Trump seems determined to impose political control over monetary policy, believing that low interest rates will benefit his voters in the short term.
The Federal Reserve, while not infallible, has built a reputation over 111 years as one of the cornerstones of global financial stability. Investor confidence in its independence has made the dollar the world's primary currency and U.S. bonds a safe haven in times of crisis.
Ironically, this battle comes at a time when the term of Federal Reserve Chairman Jerome Powell ends next May, giving Trump a historic opportunity to shape the central bank's board according to his vision. Experts warn that subjecting monetary policy to political whims could lead to economic disasters with dire consequences.
In the background, fears are growing that the dollar may lose its status as a global reserve currency and that investor confidence in the American economy may decline. This battle is not just a fleeting political dispute, but an existential confrontation for the model of financial independence that has endured for over a century.
The "Washington Post" warns of a terrifying scenario: rising borrowing costs, rampant inflation, and a collapse of global investors' confidence in the dollar. Economic analyst Heather Long paints a grim picture of an economy forced to live with artificially low interest rates, which could lead to new real estate bubbles and a debt crisis reminiscent of the 1970s.
The greatest danger lies in the possibility of repeating the "lost decade" experienced by Argentina in the 1980s, where the economy shifts from a state of growth to chronic recession. But Trump seems determined to impose political control over monetary policy, believing that low interest rates will benefit his voters in the short term.
The Federal Reserve, while not infallible, has built a reputation over 111 years as one of the cornerstones of global financial stability. Investor confidence in its independence has made the dollar the world's primary currency and U.S. bonds a safe haven in times of crisis.
Ironically, this battle comes at a time when the term of Federal Reserve Chairman Jerome Powell ends next May, giving Trump a historic opportunity to shape the central bank's board according to his vision. Experts warn that subjecting monetary policy to political whims could lead to economic disasters with dire consequences.
In the background, fears are growing that the dollar may lose its status as a global reserve currency and that investor confidence in the American economy may decline. This battle is not just a fleeting political dispute, but an existential confrontation for the model of financial independence that has endured for over a century.
