Analysis: Federal Reserve Independence Challenged, Business Community Silence Raises Concern

BlockBeats News, January 13th: Against the backdrop of the Trump administration launching a judicial investigation into Federal Reserve Chair Powell, the independence of the Federal Reserve is facing a severe challenge. However, despite the traditional consensus that central bank independence is the cornerstone of developed economies, the U.S. business community remains unusually calm.

It was disclosed that the U.S. Department of Justice has issued a criminal investigation subpoena to Powell regarding the renovation cost of the Federal Reserve headquarters. Powell responded unusually firmly, stating that the investigation is not about testimony or the project itself, but rather because the Federal Reserve did not cater to the president's preferences on interest rate policy, posing a "threat to central bank independent decision-making."

Although this event briefly caused market turbulence, large corporations, industry organizations, and CEOs have been almost collectively silent in public. Jeffrey Sonnenfeld, Founder of the Yale CEO Leadership Institute, pointed out that private surveys show that 71% of CEOs believe that the Trump administration is eroding the independence of the Federal Reserve, 80% believe that pressuring for rate cuts is not in the overall interest of the United States, but they generally fear political retaliation if they speak out publicly.

Analysis suggests that behind the business community's silence are concerns about the reality of "being named for retaliation" as well as a reliance on and speculative psychology in a low-interest-rate environment. Some corporate executives choose to influence policy through private communication, while others are betting that Trump will ultimately "blink in the showdown (TACO)."

Some scholars point out that the market's vigilance against political intervention in the central bank is decreasing, with some in the business community and on Wall Street even agreeing with Trump's intuitive judgments. This attitude may indicate that U.S. monetary policy is entering a new stage that is more politically colored.