Trump finally got his wish, the "headstrong" Fed also has a day when it admits defeat and gives in to him!

The Fed's Vice Chairman Bowman suddenly shifted direction, starting to strongly support the Fed in cutting interest rates three times this year. This move appears to be a concession to Trump, but in reality, it reveals a critical situation where monetary policy has been deeply hijacked by politics.

Bowman, as the Fed's most stubborn hawk, insisted last year that "there will be no interest rate cuts before 2025". However, after Trump publicly threatened to "replace the entire Fed board," she rapidly shifted her stance, even bypassing economic data to directly set a rate cut timeline for September—this blatant political surrender is underpinned by a threefold calculation:

First, Trump's judicial clampdown has choked the Fed's throat. The two loyalist governors he just appointed (Shelton and Waller) hold key voting power, and the Justice Department has covertly restarted the investigation into Bowman’s husband for business fraud, forcing him to comply;

Secondly, interest rate cuts have become election fuel. Three interest rate cuts can temporarily stimulate the stock market and mask the stubborn 8.2% inflation, paving the way for Trump's campaign, but they also lay the groundwork for asset bubble risks.

Thirdly, the technical independence has completely collapsed. While Bowman claims that "more evidence of cooling inflation is needed," he simultaneously forcefully commits to the pace of interest rate cuts, a contradictory statement that even Wall Street analysts ridicule as a "performance under a political teleprompter."

However, the cost of this capitulation is heavy—if interest rates are hastily cut in September, it may repeat the mistake of the monetary easing that led to hyperinflation before the 1976 election. The Fed's trade-off of a century of credibility for temporary political safety may ultimately end the myth of "central bank independence."
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