06:52
Bitunix analyst: Trump pressures the Fed, the US economy may fall into a stagflation cycle.
BlockBeats news, on November 19, the American monetary system is facing a new round of political turmoil. The confrontation between Trump and the Fed has escalated from a war of words to a substantive power struggle, as he attempts to dismiss Governor Cook and insert economic advisor Milan into the FOMC, aiming to create a "super majority" that supports significant interest rate cuts. Several economists have modeled that if monetary policy falls under political control, the U.S. will first experience a brief prosperity characterized by growth and low unemployment, followed by structural consequences of accelerating inflation, rising nominal interest rates, and slowing economic growth, with the risk of stagflation from the 1970s re-emerging. Analysis also points out that politicians often closely bind interest rate decisions to election cycles; while short-term stimulus can create superficial prosperity, the cost is uncontrollable inflation and subsequent deep adjustments. If Trump successfully reshapes the board before 2026, the independence of the Fed could be eroded, jeopardizing the dollar's reserve status and long-term borrowing.

