Global Markets React to Trump's Fed Tensions
Tensions rise in global markets as President Trump attacks the Fed's independence, causing fluctuations in shares and Treasury bonds. Trump's move to fire Reserve Governor Lisa Cook over alleged improprieties shocks the market. Legal uncertainties surround Trump's authority, adding more volatility amidst other economic concerns.
Global markets are on edge following President Donald Trump's latest criticism of the U.S. Federal Reserve's independence. Trump's attempt to dismiss Federal Reserve Governor Lisa Cook over alleged financial improprieties has sent Asian equity markets and European and U.S. stock futures downward.
The resulting market instability was evident as long-term U.S. Treasuries fell, while confidence in short-term debt increased. This reflects both diminished trust in U.S. long-term credit and anticipation of further rate cuts. Currently, there is an 83% likelihood of a cut in September, as per Fed Funds futures traders.
Besides targeting the Fed, Trump threatened tariffs on countries implementing digital taxes. The European Union braces for potential sanctions linked to their Digital Services Act, adding to geopolitical tensions. With a light data calendar, markets focus on Nvidia's earnings, a crucial indicator for AI trading trends.
(With inputs from agencies.)
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