And before long, the White House may be in a stronger position to achieve its desires. The administration is urging the courts to grant stronger control over independent government agencies, a plan that could ultimately extend to appointments at the Fed.

If fortunate, the economic threat from the impending trade war will fade. The initial concerns of investors may prompt the government to seek agreements with trade partners and restrain its tariff plans. However, it is hard to imagine a return to normal trade relations when U.S. policymakers remain focused on the trade deficit, as they seem to still be doing.
And avoiding the biggest tariff shocks does not mean that everything is fine. Even a lighter blow than initially envisioned will significantly complicate the Fed's task.
If the determination – or ability – of the central bank to maintain price stability is questioned, the result will not be a one-time mild inflation spike; instead, it will be a continuing escalation of inflation. Expectations will no longer be anchored.
If monetary policy prioritizes employment over low inflation this time, people will expect it to do the same repeatedly whenever necessary. As previous stagflation episodes ( have shown, inflation eventually becomes intolerably high – and a drastic tightening of monetary policy, along with the accompanying recession, will become inevitable.
The key point of independent central banks is that they understand this mechanism and have been empowered to prevent it. Powell is right that currently no one can predict where trade and tariff policy will go: It would be a mistake to pretend otherwise and to set monetary policy based on any such premise.
Meanwhile, the White House should let Powell and his colleagues do their jobs. Limiting the central bank's freedom to act in the best interest of the economy will only amplify the costs of the administration's trade mistakes.
)#CPI Data Drops #Crypto Market Rebounds