Trump's push to overhaul Fed casts long shadow over policy meeting

Core Viewpoint - The Federal Reserve is facing increasing pressure regarding its independence and the composition of its policy-setting committee, particularly with President Trump's push for significant interest rate cuts amid concerns over job growth and rising unemployment [1][4][5]. Group 1: Federal Reserve's Independence and Composition - A federal appeals court is set to rule on whether Fed Governor Lisa Cook can remain in her position while litigation regarding her potential firing by Trump is ongoing, which could impact the Fed's independence in monetary policy [2]. - The U.S. Senate is expected to confirm Stephen Miran to the Fed's Board of Governors, which may align the Fed more closely with the Trump administration's calls for aggressive rate cuts [3]. Group 2: Interest Rate Decisions - Trump has publicly urged the Fed to cut interest rates significantly, suggesting a reduction larger than previously considered, which he believes will boost the housing market [4]. - The Fed is anticipated to lower its benchmark interest rate by 0.25 percentage points to a range of 4.00%-4.25% at the conclusion of its meeting, despite concerns about inflation [4][5]. - Further rate cuts may occur in October and December, but at a slower pace than Trump's demands, as economists view his call for a 1% reduction as misaligned with the need to maintain stable inflation [5]. Group 3: Risks to Monetary Policy - A recent poll indicated that a majority of former Fed policymakers perceive a heightened risk that diminished Fed independence could lead to overly loose monetary policy and increased inflation [7].