Former Fed Vice Chairman: Trump cannot affect Fed's independence, tariff war does not necessarily lead to inflation

Former Federal Reserve Vice Chairman Quarles recently stated that despite Trump’s election and inauguration, the Fed’s independence, inflation, and labor market will not be threatened. He emphasized that tariffs have limited impact on inflation, and there are many misunderstandings about the Fed’s independence. With Trump’s upcoming inauguration on January 20th, Quarles stated that the Fed’s independence, inflation, and labor market will not be threatened by his presidency. He emphasized the misunderstanding of the Fed’s independence by the public and believes that tariffs should not be seen as the main cause of inflation. Quarles also predicted that if Trump initiates a large-scale deportation of illegal immigrants after taking office, the impact on the labor market will be limited. He believes that the resilience and diversity of the US labor market are sufficient to absorb the impact of such policy changes. This week’s focus follows the CPI data. After last week’s unexpected non-farm payroll report, the market has pushed back the expected timing of the Fed’s next rate cut to June, leading to a widespread decline in cryptocurrency and US stocks. This Wednesday (the 15th), the consumer price index (CPI) to be released will be an important indicator for the market to judge whether US inflation is likely to rise again. Currently, economists predict that the CPI for December last year will rise by 2.9% year-on-year. If it significantly exceeds this figure, BTC and US stocks may test lower prices, so investors should be cautious.