Economist: The politicization of the Federal Reserve is on the rise

The Fed's politicization, which has intensified in recent months, has exacerbated the higher risk premium in the United States, exacerbated by rising budget deficits and debt, the government's unpredictability and investors' reassessment of dollar exposure, said Sulin Wang, chief economist at RBC Capital Markets in Australia and New Zealand. While the reflexive reaction to Cook's developments has had a slightly positive impact on front-end yields on Treasuries, this will not last if, under duress from the Trump administration, the Fed finally compromises and cuts interest rates amid stubbornly high inflation.