US Federal Reserve independence is under renewed scrutiny as President Donald Trump ramps up pressure for lower interest rates and prepares to replace Fed Chair Jerome Powell. Trump’s nominee, Kevin Warsh, has pledged not to pre‑commit to rate decisions, but his confirmation is being considered as inflation remains above the Fed's 2% target and geopolitical tensions —from the Iran war to ongoing trade disputes — cloud the outlook.

Economists warn that political interference in monetary policy could undermine confidence in the US dollar and global financial markets. While lower interest rates can boost short‑term growth, history — from Turkey to Europe — shows that weakening central bank independence often fuels inflation and instability. With Powell's term ending in mid‑May, investors are watching closely to see whether the world's most influential central bank can resist political pressure as inflation risks rise again.

This video summary was created by AI from the original DW script. It was edited by a journalist before publication.