The urgency of central bank independence: why is the American business community choosing to remain silent collectively?

The independence of the Federal Reserve is facing an unprecedented political impact. The Trump administration has launched a criminal investigation into Fed Chair Powell, ostensibly over renovation costs, but in reality to pressure the Fed to cut interest rates. Even more shocking is that the American business community has almost collectively fallen silent; this silence hides a deeper market crisis than direct confrontation.

The Paradox of Business Silence

On the surface, the reaction of the American business community to the threat to Fed independence appears indifferent. However, a private survey conducted by Yale University’s Chief Executive Leadership Institute reveals the true attitude differences:

What does this stark contrast indicate? Business leaders are not truly indifferent; they are being held hostage by fear.

The Triple Motivations Behind the Silence

The Reality of Political Retaliation Threat

Top executives generally worry that speaking out publicly will invite political retaliation. Under Trump’s assertive style, this is not just a baseless concern. Companies rely on government contracts, regulatory approvals, and tax incentives; opposing the president openly carries too high a cost.

The Hidden Benefits of Low Interest Rates

The silence also reflects dependence on the low-interest-rate environment. Lower borrowing costs benefit corporate expansion, stock buybacks, and mergers and acquisitions, which makes some executives not entirely opposed to Trump’s rate-cutting demands—they just prefer not to voice it publicly.

Betting on Trump “Backing Down” at the Last Minute

Some business figures are betting that Trump will ultimately retreat from aggressive actions. This speculative mindset leads them to wait and see rather than act, hoping the issue will resolve itself.

The Market Has Already Responded

Although the business community remains silent, the market has spoken through risk-averse sentiment. According to the latest information:

• Equities, bonds, and currencies have experienced a rare simultaneous decline
• Gold prices have risen to $4,600 for the first time
• Bitcoin briefly fell to $90,000, then rebounded to $91,000
• Traditional safe-haven assets like gold and the Swiss franc led the gains

These reactions indicate that investors’ concerns about Fed independence have already translated into concrete actions. Even a 1% increase in Bitcoin may seem steady, but it precisely shows that traders have incorporated this issue into their daily risk management, rather than treating it as an unexpected shock.

Deeper Systemic Crisis

The Decline of Central Bank Independence

This is not just an American issue. Global markets’ vigilance against political interference in central banks is waning, with some business and Wall Street figures even beginning to accept Trump’s intuitive judgments about the Fed. This means that the once-esteemed independence of central banks, considered a cornerstone of modern economies, is being eroded.

The Politicization of Monetary Policy

Powell’s predicament marks a turning point. U.S. monetary policy is entering a new phase with increased political influence, which will reshape the logic of global financial markets. When central bank decisions are no longer based solely on economic fundamentals but are influenced by political pressure, market confidence foundations will be shaken.

Signals from Successor Candidates

Trump plans to interview candidates like BlackRock CIO Rick Rieder in January; Rieder has called for the Fed to cut rates to 3%. This candidate itself sends a signal: the new Fed chair may be more obedient to the White House.

Summary

The crisis of Fed independence is not about a criminal investigation per se but reflects profound changes in the U.S. political and economic ecosystem. The silence of the business community is more alarming than open criticism because it signifies that market participants have given up efforts to defend institutional bottom lines and are instead adopting individual coping strategies.

This attitude shift will have long-term consequences: weakening central bank independence could lead to more short-term monetary policies, increased asset price volatility, and exposure of investor confidence fragility. For the cryptocurrency market, this presents both risks (policy uncertainty) and opportunities (rising demand for safe-haven assets). The key is to recognize that we are witnessing a transition era, and the market’s risk-averse reactions are just the beginning of this transformation.