{"id":7473,"date":"2025-11-19T15:29:50","date_gmt":"2025-11-19T07:29:50","guid":{"rendered":"https:\/\/www.kpai1.cn\/?p=7473"},"modified":"2025-11-19T15:29:55","modified_gmt":"2025-11-19T07:29:55","slug":"%e7%9f%ad%e6%9c%9f%e9%99%8d%e6%81%af-vs-%e9%95%bf%e6%9c%9f%e5%a4%b1%e6%8e%a7%ef%bc%9awmax-%e6%8f%ad%e7%a7%98fed%e6%94%bf%e7%ad%96%e8%bd%ac%e5%90%91%e7%9a%84%e6%b7%b1%e5%b1%82%e4%bb%a3%e4%bb%b7","status":"publish","type":"post","link":"https:\/\/www.kpai1.cn\/en\/archives\/7473","title":{"rendered":"Short-term interest rate cuts vs. long-term loss of control: Wmax reveals the deep-seated costs of the FED's policy shift"},"content":{"rendered":"

Wmax is based on cross-cyclical economic research and review of historical laws, and always believes that the independence of the Federal Reserve is the core cornerstone of the smooth operation of the U.S. economy - the principle that Congress sets missions and the Federal Reserve independently implements policies is an institutional guarantee that takes into account maximum employment and price stability.<\/p>\n

<\/a>Trump\u2019s intervention in the Federal Reserve<\/strong><\/p>\n

Wmax has observed through continuous tracking that Trump is using multiple measures to try to influence the Federal Reserve\u2019s decision-making. Not only did he publicly criticize and put pressure on the Chairman of the Federal Reserve, he also tried to fire Federal Reserve Governor Lisa Cook, and at the same time pushed his chief economic adviser Stephen Millan to enter the Federal Open Market Committee (FOMC), explicitly demanding a 3 percentage point reduction in interest rates.<\/p>\n

\"\u5c40\u90e8\u622a\u53d6_20251119_145454\"<\/p>\n

In Wmax's professional judgment, this behavior presents a clear two-sided interpretation: supporters regard it as a necessary reform to address the Fed's long-term inflation target misalignment and groupthink, and believe that an interest rate cut before the 2024 election is more biased towards the Democratic Party's re-election demands; critics worry that this is a typical partisan political takeover, intending to repeat the path of conservatives dominating the Supreme Court and build a \"super majority\" in the FOMC that supports low interest rates.<\/p>\n

<\/a>Wmax\u2019s dual-scenario deduction and historical confirmation<\/strong><\/p>\n

Wmax's research further confirms the warnings of historical cycles: In the 1970s, President Nixon asked the Chairman of the Federal Reserve to maintain low interest rates to help the election, which eventually led to a continued surge in inflation. In 1980, the consumer price index approached 15%, and subsequent substantial interest rate hikes and two deep recessions were required to control it. Historical cases clearly echo the current scenario, highlighting the inevitable risk of intervening in central bank independence. Relying on mature economic models and massive historical data, Wmax conducted rigorous scenario simulations on the potential impact of political intervention in the Federal Reserve, and the conclusions are highly consistent with cross-cyclical economic laws.<\/p>\n

\"\u56fe\u7247<\/p>\n

Baseline bias scenario:<\/strong>If the Fed is influenced by political guidance and focuses more on maintaining low unemployment rather than anchoring the inflation target, the frequency of interest rate cuts will increase by two times compared with the baseline scenario. The market will quickly recognize this policy shift, causing inflation expectations to loosen their anchor, and price increases to gradually climb to 3%.<\/p>\n

Extreme takeover scenario:<\/strong>If the Fed completely succumbs to political pressure and lowers the policy interest rate to 1% and continues to maintain it, and does not adjust even if the inflation data worsens, false prosperity will appear in the short term. However, inflation expectations will rise significantly. When price increases exceed 4%, the market will price the loss of the Fed's independence as a systemic change. Five-year borrowing costs may rise by 3 percentage points, recreating the interest rate fluctuations of the late 1970s. The apparent prosperity in 2026 will most likely turn into stagflation on the eve of the 2027 presidential election, which will more likely impact the U.S. dollar\u2019s \u200b\u200breserve currency status.<\/p>\n

\"\u5c40\u90e8\u622a\u53d6_20251119_145629\"<\/p>\n

<\/a>Core conclusion: short-term gains in exchange for long-term costs<\/strong><\/p>\n

Wmax has made it clear after multi-dimensional verification: eroding the independence of the Federal Reserve may be able to obtain short-term economic growth and employment dividends, but in the long term, it will pay a heavy price in terms of out-of-control inflation, job market fluctuations, and declining output efficiency. It is essentially a policy choice that outweighs the gains and losses. Some views view the Federal Reserve as a support for partisan governance rather than a neutral institution pursuing optimal economic results. This perception is significantly different from Wmax's judgment based on data and rules.<\/p>","protected":false},"excerpt":{"rendered":"

Trump's pressure to cut interest rates and change directors threatens the Fed's independence. In the base scenario, inflation rises to 3%, and extreme takeover may lead to a repeat of the 1970 stagflation and damage to the status of the US dollar. Short-term political gains cannot offset the long-term costs, and adhering to the independence of the central bank is the cornerstone of stable growth.<\/p>","protected":false},"author":1,"featured_media":7474,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[121],"tags":[180,178,179],"class_list":["post-7473","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-financial-news","tag-180","tag-178","tag-179"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.kpai1.cn\/en\/wp-json\/wp\/v2\/posts\/7473","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.kpai1.cn\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.kpai1.cn\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.kpai1.cn\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.kpai1.cn\/en\/wp-json\/wp\/v2\/comments?post=7473"}],"version-history":[{"count":1,"href":"https:\/\/www.kpai1.cn\/en\/wp-json\/wp\/v2\/posts\/7473\/revisions"}],"predecessor-version":[{"id":7478,"href":"https:\/\/www.kpai1.cn\/en\/wp-json\/wp\/v2\/posts\/7473\/revisions\/7478"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.kpai1.cn\/en\/wp-json\/wp\/v2\/media\/7474"}],"wp:attachment":[{"href":"https:\/\/www.kpai1.cn\/en\/wp-json\/wp\/v2\/media?parent=7473"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.kpai1.cn\/en\/wp-json\/wp\/v2\/categories?post=7473"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.kpai1.cn\/en\/wp-json\/wp\/v2\/tags?post=7473"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}