Trump criticizes Powell again, is an interest rate war imminent?

On July 13 local time, on the tarmac at Andrews Joint Base in Maryland, U.S. President Trump once again targeted Federal Reserve Chairman Jerome Powell, vehemently calling for his resignation. Trump stated, "Powell is very bad for the country. We should have the lowest interest rates in the world, but we don't." This statement escalated the already tense relationship between the Federal Reserve and the White House, which has been under close scrutiny.

This is not the first time Trump has criticized Powell. Looking back, since Trump returned to the White House, he has frequently expressed dissatisfaction with the Federal Reserve's monetary policy and has publicly criticized Powell multiple times. However, such severe accusations this time have drawn strong attention from all sectors. Trump has always emphasized economic growth; in his view, low Interest Rates are a powerful weapon to stimulate rapid economic growth, allowing the U.S. economy to develop like a rocket. He hopes to promote corporate investment and stimulate consumer spending through extremely low Interest Rates, thereby driving employment and overall economic prosperity.

On the Federal Reserve side, the decision-making team led by Powell regards controlling inflation as the top priority. In Powell's view, stabilizing prices is the cornerstone of healthy economic development. If the interest rate is lowered too much, it may trigger an excess supply of money in the market, leading to soaring prices and undermining the stable structure of the economy. For example, in the past, some countries adopted overly loose monetary policies, ultimately triggering hyperinflation and plunging the economy into long-term chaos. These cases are important references for Powell's decision-making.

Currently, the conflict between Trump and Powell is becoming increasingly sharp, and the upcoming interest rate battle may become exceptionally fierce. From the market's reaction, many investors have already begun to worry. A strategist from Deutsche Bank has issued a stern warning, stating that the risk of Trump pressuring Powell to resign early is severely underestimated by the market. If Powell is indeed forced to resign, the trade-weighted dollar index could plummet by 3%-4% within 24 hours, and the U.S. fixed income market would also face a selling pressure with yields sharply rising by 30 to 40 basis points. It is foreseeable that if this interest rate battle begins, the global financial markets may also be shaken.

It is worth mentioning that Trump's style has always been straightforward, and he is notorious for holding grudges. In the past, anyone he deemed to be obstructing his policy implementation would face continuous pressure from him. Powell's insistence on interest rate issues undoubtedly touched Trump's bottom line. However, Powell is not without confidence; he has repeatedly stated that Trump, as president, does not have the legal authority to remove him from office, and he will work until the end of his term, which is May 2026. Moreover, the independence of the Federal Reserve is protected to some extent by law and institutional safeguards.

Regardless of where this power and policy game ultimately leads, the market is closely watching. Investors are anxious, and companies are hesitant to recklessly expand production and investment. In the future, will Trump continue to increase pressure? Can Powell hold the line? The smoke of this interest rate war has already spread, and the subsequent developments are worth everyone's attention. #BTC再创新高#