Analysis: The Federal Reserve's independence is under threat, and the business community's silence raises concerns

BlockBeats News, January 13, under the backdrop of the Trump administration launching a judicial investigation into Federal Reserve Chairman 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 American business community has shown an unusually calm response.

According to disclosures, the U.S. Department of Justice has issued a criminal investigation subpoena to Powell regarding the renovation costs of the Federal Reserve headquarters. Powell responded with rare firmness, stating that the investigation does not revolve around testimony or the project itself, but is due to the Federal Reserve not accommodating the president's preferences in interest rate policy, calling it "a threat to the central bank's independent decision-making."

Although this incident once caused brief market fluctuations, large enterprises, industry organizations, and CEOs have remained almost collectively silent in public. Jeffrey Sonnenfeld, founder of the Yale CEO Leadership Institute, pointed out that private investigations show 71% of CEOs believe the Trump administration is eroding the Fed's independence, and 80% believe 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 the silence of the business community stems both from real concerns about being "named and retaliated against," as well as a reliance on and speculative mentality toward a low interest rate environment. Some corporate executives choose to influence policy through private communication, while others are betting that Trump will ultimately "back down at the last minute (TACO)" on radical actions.

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