Powell Breaks Protocol as Trump Pressure Escalates, Fed Faces Unprecedented Scrutiny

Federal Reserve Chair Jerome Powell has shattered decades of central bank tradition by publicly addressing a federal investigation into the Fed's $2.5 billion headquarters renovation. The move comes as former President Donald TRUMP intensifies pressure for deep rate cuts, drawing parallels to Turkey's 2019 economic crisis when President Erdoğan fired his central bank chief.

Markets remained surprisingly calm despite the institutional clash, with stocks showing minimal movement and bond yields holding steady. Investors appear confident the Fed will resist political pressure to slash rates to near-zero levels. Yet economists warn the public confrontation between the WHITE House and Federal Reserve marks a dangerous erosion of the institutional anchors that have maintained global economic stability since World War II.

The situation echoes emerging market crises more than typical U.S. policymaking. Klaas Knot, former Dutch central bank head, noted America once led by example in supporting independent institutions crucial for market economies. That leadership now appears in question as the Fed chair faces unprecedented political scrutiny.