Bitunix Analyst: Trump pressures the Federal Reserve as the U.S. risks entering a stagflation cycle

BlockBeats News, November 19th, the U.S. monetary system faced a new wave of political shock. The conflict between Trump and the Federal Reserve has escalated from verbal attacks to a real struggle for control. Trump is attempting to remove Fed Governor Cook and install his economic adviser, Milan, into the FOMC—an effort to build a “supermajority” that supports aggressive rate cuts.

Multiple economists, using macroeconomic modeling, warn that if monetary policy becomes politically driven, the U.S. would likely experience a short period of growth and low unemployment, followed by a structural downturn marked by reaccelerating inflation, rising nominal rates, and weakening economic growth—mirroring the stagflation dynamic of the 1970s. They also highlight that when politicians dominate rate decisions, policy tends to align with election cycles: short-term stimulus can generate temporary prosperity, but at the cost of long-term inflation instability and painful subsequent adjustments.

If Trump succeeds in reshaping the Board of Governors by 2026, the Fed’s independence could be fundamentally undermined, and both the U.S. dollar’s reserve status and long-term borrowing costs may be repriced by global markets.

Bitunix Analyst View: From historical precedent to Trump’s current strategy, the objective is clear—direct intervention in the interest-rate path. The consequence would not be short-term volatility but a systemic erosion of monetary credibility. If the Fed is forced to turn sharply dovish before inflation is under control, the U.S. economy may enter the classic cycle of “short-term boom followed by stagflation.” For global capital, the real risk is not Trump himself—but the loss of the Federal Reserve as the final safeguard of U.S. monetary discipline.