The controversy of the "renewal" of the Federal Reserve: Powell's resignation and Trump's interest rate demands

In the global economic scenario, every move by the Federal Reserve (FED) has repercussions throughout the economy. Recently, a surprising piece of news shook the financial sector — the chairman of the Federal Reserve (FED), Jerome Powell, resigned due to renovation issues at the Federal Reserve (FED) building. This event was like a major impact bomb, instantly becoming the focus in the global economic field, and still involves the complex demand from the U.S. president, Donald Trump, who is strongly insisting on a three percentage point interest rate cut, making the entire financial situation even more confusing.

The origin of the issue is the renovation project of the Federal Reserve building (FED). The budget for the renovation, initially estimated at 1.5 billion dollars, eventually rose to 2.6 billion dollars. This enormous cost overrun generated strong attention and discontent from all parties, with Trump being the first to express his anger. For him, the renovation led by Powell is a blatant waste of taxpayer funds. Trump stated that, in the current economic situation, the Federal Reserve (FED) should focus more on stabilizing the economy and promoting employment, rather than spending enormous amounts on such a luxurious renovation. The official White House letter made it clear that this renovation project not only exceeds the budget by 700 million dollars but also includes numerous luxurious facilities, as well as an office area far beyond the standard, which is undoubtedly a waste of public resources. In fact, the headquarters of the Federal Reserve (FED) is not the first to undergo a renovation; there was a major renovation between 1999 and 2003, and now, with such a high investment again, it is no wonder it is accused of ostentation.

Powell, faced with a sea of criticism, also felt the pressure. Although he explained that the excessive costs were due to many unforeseen problems encountered during the renovation, such as the amount of asbestos inside the building exceeding expectations, requiring greater investment in safety treatment; the presence of toxic substances in the underground soil, which required additional investment for cleanup; and the groundwater level being higher than expected, which brought enormous difficulties to construction, increasing the construction costs. However, these explanations seem to have failed to completely calm external doubts, especially under the ongoing pressure from the Trump administration, leading Powell to finally choose to resign.

Meanwhile, Trump's dissatisfaction with the Federal Reserve's interest rate policy (FED) reached its peak. He strongly demanded that the Federal Reserve (FED) reduce the interest rate by three percentage points, believing that only in this way could the additional growth of the American economy be effectively stimulated. In Trump's view, although the American economy maintains a certain pace of development, it still faces many challenges; lowering the interest rate can reduce the cost of financing for companies, encouraging them to expand investments and production, thus creating more job opportunities and promoting economic prosperity. Moreover, lower interest rates can also ease the government's debt burden, allowing the United States to save a significant amount of resources when paying off the national debt.

However, this Trump request may trigger a chain reaction in global financial markets. Once the Federal Reserve (FED) significantly reduces interest rates, it is very likely that this will lead to a large monetary expansion worldwide. Other countries, to maintain competitiveness and the stability of their economies, will likely follow suit, resulting in a substantial increase in the global money supply. This could not only trigger global inflation but also further increase the factors of instability in global financial markets, bringing enormous uncertainty to the development of the world economy.

When reviewing the history of the Federal Reserve (FED), the term of directors is generally 14 years, but since 2000, up to 15 directors have resigned early. This phenomenon is influenced by changes in economic conditions, policy divergences, among other factors, and also reflects that the Federal Reserve (FED) is facing a severe test of its internal decision-making mechanics and personnel stability in the face of a complex and changing economic environment, as well as pressures from various parties. Powell's resignation due to reform issues, as well as Trump's stringent demands regarding interest rates, undoubtedly place the Federal Reserve (FED) and the global economy at a new crossroads. Where the future will lead, everyone is watching.