The tension between U.S. President Donald Trump and Federal Reserve (Fed) Chair Jerome Powell has once again returned to the forefront of global markets. I first addressed this confrontation on May 6, 2025, in an article titled βTrump vs. Powell: US economy is 'too big to fail,'β where I correctly anticipated that macroeconomic data would be the decisive factor ahead of the Fedβs interest rate decision on May 7.
The primary foundation of this assessment lay in historical precedent. Throughout past episodes of friction between U.S. presidents and Fed chairs β most notably during the Volcker era in the 1980s, the Greenspan years of the 1990s and the Bernanke period during the 2008 global financial crisis β Fed leaders consistently demonstrated a deep commitment to institutional culture and market-oriented decision-making.
While recent developments have carried this debate into new territory, the Trump-Powell tension should not be reduced to a personal dispute. Rather, it reflects the re-emergence of one of the most fundamental questions facing modern economies: Will politics govern the ec
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