Fed's independence under attack

Fed meeting: Will the Fed bow to Trump?

For some time now, President Trump has been calling on the Fed to cut interest rates significantly, repeatedly mentioning a reduction of 300 basis points. Trump has reinforced his demands with massive public attacks on the Fed, targeting Fed chair Jerome Powell in particular.

Has Trump now softened the Fed's stance? After all, the Fed is likely to cut its key interest rates by 25 basis points at its meeting next week, ending a nine-month period of unchanged key interest rates. In fact, Trump's sustained pressure may gradually be having an effect. However, there are also economic reasons for loosening monetary policy. The labor market has cooled significantly, with an average of only 29,000 new jobs created in the three months to August. This increases the risks for the Fed's full employment target. Despite inflation remaining too high, this argues for a certain easing of key interest rates as part of the Federal Reserve's risk management approach.

For full text see attached PDF-Version.