BIS Backs The Fed, Sounds Alarm On Global Economic Risks
For several weeks, Donald Trump’s statements against the current Fed Chairman Jerome Powell have been causing turmoil in the financial markets. This unprecedented pressure prompted the Bank for International Settlements (BIS) to intervene publicly. The goal: to defend the independence of central banks, a crucial pillar for the stability of the global economy.
In Brief
- The BIS warns about political risks threatening the independence of global central banks.
- Trump’s attacks on Powell weaken financial stability and the global economy.
BIS: Last Barrier Against Political Risk on the Global Economy
In its annual report published Sunday, the BIS warns about the growing risks of political interference in the management of interest rates . Without directly naming Donald Trump, the Basel-based institution emphasizes the vital role of an independent monetary policy. According to it, a central bank must be able to do what it deems necessary, even if it does not align with the government’s wishes.
More explicitly, recent tensions stem from Trump’s verbal attacks on Powell. The latter called the current Fed Chairman a “beast” and “stubborn” on the Truth Social network. The American president indeed wants a rapid rate cut, despite persistent inflation and the uncertain impact of tariffs. These pressures undermine financial stability and generate worrying volatility for investors.
In this regard, the BIS highlights in its report that central banks face a “delicate trade-off.” The dilemma? Support economic growth through low rates or preserve monetary value in the face of growing public debt.
What Impact on Cryptocurrencies and the Real Economy?
The attack against the Fed’s financial independence does not only concern the United States. It could also disrupt the global economy, including crypto markets.
A Fed subjected to political power would actually create a dangerous precedent, threatening the credibility of economic measures. For holders of bitcoin or digital assets, this uncertainty could reinforce the thesis of a safe-haven asset outside of the classic monetary system.
Conversely, an economic crisis triggered by a loss of confidence in the Fed could also cause a general decline in risky assets. It will thus depend on the ability of central banks to resist political pressures and to navigate through this phase of economic uncertainty.
The BIS therefore plays the caution card to protect the global economy. Faced with Trump’s ambitions , monetary independence could well become one of the major geopolitical issues of 2025.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like

Deutsche Bank: The "fifth wave of tech stock rally" in US stocks since late July has peaked, prepare for a "V-shaped reversal"
Deutsche Bank has downgraded its rating on US technology stocks from overweight to neutral, noting that the fifth round of tech stock rally since July 29 is approaching the upper boundary of the long-term trend channel. The current upside potential is only about 4 percentage points, while historical trends indicate downside risks could reach 16 percentage points. Funds are expected to rotate into other sectors, and the European market, with its lower tech exposure, is likely to benefit relatively. However, Deutsche Bank emphasized that the long-term outperformance trend of technology stocks remains unchanged.
How expensive is AI computing power rental in the US? "Spot price" is twice that of long-term contracts, and four times the return threshold for cloud service providers.
The short-term spot leasing price for AI computing power reaches as high as $40 to $50 billion per gigawatt per year, while the price for long-term contracts is only $20 billion per year, and the breakeven threshold for supercomputing cloud operators is around $12 billion per year. However, according to Goldman Sachs, the fundamental reason why hyperscale cloud providers like Google rent computing power at such significant premiums is that their in-house capacity cannot keep up; once their own capacity catches up, the spot premium will disappear.

‘More bullish on Bitcoin’ – Strategy leads 91% of corporate BTC buying
