"Fed megaphone": Fed independence challenged again, no rate cut expected this month

The dispute over < b > building renovations has emboldened a faction within the Trump administration that has long wanted to challenge the Fed's independence. Some economic advisers, such as Treasury Secretary Vincent Bescent, have generally advocated maintaining the Fed's independence. In a recent Fox Business interview, for example, Mr. Bescent declined to criticize Mr. Powell over the building renovations. But other advisers and outside allies have been exploring legal avenues to remove Mr. Powell from office since before the election. "No one during his term is willing to make major renovations to a historic building, let alone two historic buildings that need extensive repairs," Mr. Powell said in testimony last month. The move follows a broader push by Mr. Trump to lower interest rates to lower the government's borrowing costs. < b > The Federal Reserve is not expected to cut interest rates at its meeting later this month, but Powell has hinted that a rate cut could come later this year if inflation performs well or the labor market is weak. Trump wants to reduce the cost of servicing the federal deficit, which his tax cuts could widen. But outside of extreme scenarios such as war, central banks in advanced economies will resist such pressure. They argue that stabilizing inflation is essential to maintaining confidence in their currencies.