US Federal Reserve Independence Faces Political Pressure Amid Trump Actions

US President Donald Trump's attempts to influence the Federal Reserve, including his move to fire Fed Governor Lisa Cook and pressure on Chair Jerome Powell to cut interest rates, have sparked global concern over the erosion of central bank independence. Bangko Sentral ng Pilipinas Governor Eli Remolona Jr. emphasized that protecting the Fed's independence is crucial as it underpins the independence of other central banks worldwide, warning that political interference could destabilize global financial markets and weaken monetary policy credibility. Experts note that the Fed's independence, established since the mid-1980s to maintain low inflation, faces unprecedented challenges under Trump, with potential consequences including a weaker dollar and market volatility. Powell recently signaled a possible interest rate cut despite inflation risks, navigating the difficult balance between responding to Trump's demands and maintaining the Fed's autonomy. Financial advocates warn that this pressure threatens the principle that has kept inflation stable for decades, raising concerns about the broader implications for global economic stability. The situation has prompted calls for investors to diversify away from dollar-denominated assets to mitigate risks associated with potential political interference in monetary policy.