Federal Reserve Rate Cut Potential
Recent reporting indicates the rising tension between the US Administration and the Federal Reserve after Fed chair Jerome Powell publicly pushed back against the political attack which questioned the Fed ‘s policy direction and leadership. Also said by the report the administration has expressed concern that Powell’s defiance could undermine Its afford to replace or pressure the Fed Chair, raising Broader questions about the independence of the US central Bank.
The stem of this conflict mainly from the disagreements over monetary policy, specifically, Interest rate and economic management. The administration prefers looser monetary conditions to support growth , market, and fiscal objectives. Meanwhile, The federal reserve, Under Powell, continues to emphasize inflation control, data-driven decision and institutional independence.
Meanwhile, the political pressure on the Federal reserve under Trump takeover raises concerns about the loss of central bank independence, which is historically bullish for gold. Markets interpret legal and political threats against the Fed as a signal that future monetary policy could shift from prioritizing political goal over inflation control, increasing the risk of easier policy, lower real interest rate, and a weaker US dollar.
Geopolitical tension
Trump risks Upending US-China Trade Truce with Iran Tariff Vow.
President Donald Trump’s announcement January 13 2026, that the US will impose a 25% tariff on any country doing business with Iran, Aiming to pressure Tehran surrounded by the violent domestic unrest. He added ” The new duty will be “Effective Immediate” Without providing Detailed information about the scope of implementation of the charges. This has thrown into question the fragile US-China trade Truce that had eased tit for tat tariff between Washington and Beijing, the tariff threat could disrupt cooperative trade negotiation with China and other major partners still managing a temporary pause on the tariff escalation.
The renewed trade conflict would also pressure the US Dollar to weaken, increasing the expectation that the central bank may need to stay accommodative to support the growth and impose a rate cut. Meanwhile, Trump’s Iran Tariff vow threatens to unravel the fragile US-China Trade truce, imposing the likelihood of renewed tariff escalation, Supply-Chain disruptions and slower global growth. All these factors shape the bullish trend for the because it raises concern to both global trade and Geopolitical risk at the same time.
