TechFlow, July 12 — According to Jinshi Data, internal disputes over the renovation of a building have emboldened a faction within the Trump administration that has long sought to challenge the Federal Reserve's independence. Some economic advisers, such as Treasury Secretary Bessent, generally advocate preserving the Fed's independence. For instance, Bessent recently declined to criticize Trump over the renovation issue during a Fox Business interview. However, other advisers and external allies have been exploring legal avenues to remove Powell from office even before the election. Powell said during his testimony last month: "No one in their right mind would want to undertake major renovations on a historic building during their term, let alone two buildings requiring extensive repairs." Previously, Trump has broadly pushed for lower interest rates to reduce government borrowing costs. The Fed is not expected to cut rates at its meeting later this month, but Powell has indicated that rate cuts could come later this year if inflation performs well or the labor market weakens. Trump aims to reduce the debt-servicing costs of the federal deficit, though his tax cuts may widen the federal deficit. However, outside extreme circumstances such as war, central banks in advanced economies resist such pressures, believing that maintaining stable inflation is crucial to sustaining confidence in their national currency.
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