When White House National Economic Council Director Hassett stated that 'the Federal Reserve will consider Trump's opinions, but interest rate decisions will remain independent', the market had actually anticipated this — it was just another tacit tug-of-war between the Federal Reserve's independence and political interference.
Hassett's rhetoric can be described as a 'model of rhetoric'; on one hand, he says 'the president's views are well-founded' and candidly states that talking to Trump is 'very interesting', even declaring that he is 'willing to talk to the president every day until he dies', clearly showing respect for the current president; on the other hand, he draws a red line, emphasizing that the Federal Reserve's interest rate decisions are a collective consensus reached with the board and FOMC members, and that Trump's opinions, no matter how 'reasonable', must be 'based on data' to count, directly rebutting the statement that 'the president's opinion holds equal weight to FOMC voting members', stating that policymakers can 'freely reject'.
Behind this is the game between the "independent tradition" that the Federal Reserve has upheld for a century and the political reality in the United States. Trump has always been critical of the Federal Reserve's monetary policy, often criticizing interest rate decisions as not aligning with his economic policy. Hassett's statement is essentially meant to reassure the market: even if he leads the Federal Reserve, he will not allow the central bank to become a subsidiary of politics. After all, the independence of the Federal Reserve is not only the cornerstone of the U.S. financial system but also an important support for global capital market confidence in the dollar—once monetary policy is entangled with politics, the foundation of the dollar's credit, the attractiveness of U.S. Treasury bonds, and even the global financial order will be impacted.
Of course, Hassett's "compromise" also reflects practical considerations. As a former White House official, he cannot completely ignore the president's policy preferences. The phrase "considering opinions" is both a way to give Trump face and to find a balance between politics and professionalism. However, what the market values more is always "action" rather than "statements": if Hassett does become chairman of the Federal Reserve, whether the subsequent interest rate policies he formulates can escape political interference and whether they can focus on economic data such as inflation and employment will be the key to determining market direction.
Hassett's statement merely reiterates a principle understood by all past Federal Reserve chairpersons: when dealing with politicians, one must grasp the art of "listening to opinions" while also upholding the bottom line of "making decisions." For investors, instead of getting caught up in the "banter" between Hassett and Trump, it is better to focus on hard indicators like inflation data and employment reports—after all, the independence of the Federal Reserve has always been reflected in data-driven decision-making rather than in polite words.
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