The politicization risk of the Federal Reserve may trigger inflation uncertainty and rising borrowing costs

ChainCatcher news, according to Jinshi reports, UBS stated that Federal Reserve Chairman Powell's speech at Jackson Hole released signals of an increased probability of a rate cut in September, but lacked guidance on a medium-term policy framework. UBS pointed out that Powell did not provide a stronger defense of the Federal Reserve's independence, and the future politicization of the Fed by Trump could lead to a resurgence of inflation uncertainty, an increase of 1 percentage point in real borrowing costs, and a chain reaction affecting fiscal policy and household savings.