"Reports that federal prosecutors have opened a criminal investigation into Federal Reserve Chair Jerome Powell raise the alarm about political interference in monetary policy. Such actions risk undermining the Fed's credibility and its ability to set interest rates based on economic conditions rather than political considerations. The developments appear to be another attempt by the US administration to pressure the central bank into aligning its monetary policy with Trump's preferences."
"The US dollar declined on Monday, unwinding Friday's gains as mounting concerns over the independence of the Federal Reserve shook investor confidence. The latter could introduce additional risk in the market. US Treasury yields could also be vulnerable to heightened volatility, as uncertainty surrounding the Fed's independence could prompt erratic moves in bond markets. Looking ahead, any new developments against Fed members could pressure US assets, including the dollar."
Reports of a criminal investigation into Federal Reserve Chair Jerome Powell sparked concerns about political interference and led the US dollar to decline, reversing recent gains. Such developments risk undermining the Fed's credibility and its capacity to set interest rates based solely on economic conditions. The US administration appears to be attempting to pressure the central bank to align monetary policy with Trump's preferences, creating additional market risk. Elevated uncertainty could induce heightened volatility in US Treasury yields and erratic bond-market moves. Any new actions against Fed members could further pressure US assets, while upcoming economic data may still shape monetary policy expectations if Fed independence concerns ease.
Read at London Business News | Londonlovesbusiness.com
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