Just in time for the latest Fed meeting, the US President appointed his confidant Stephen Miran to the Board of Governors; he immediately spoke out in favour of sharp interest rate cuts. And the Supreme Court will soon decide whether Trump has the power to sack Governor Lisa Cook. In some countries, there are already central banks that regularly follow the "recommendations" of the head of government, but for the Fed as the most important central bank in the world, a loss of independence would be a completely different matter.
But are the major central banks in Europe, Asia and North America still independent at all? Haven't they themselves extended their mandates deep into the political arena, where they now have to assert themselves against political war machines like Donald Trump? And how will this battle of the titans end?
Perhaps it will just turn into a show fight on Trump's part, as he alone could be interested in shifting the responsibility for a recession onto the reluctant Fed majority and, above all, its president Powell. This would explain why the US bond market has so far been so unimpressed by the Federal Reserve's problems. There is a lot to analyse, more on this in the new videocast.