Trump's Fed Shake-Up: Dollar Slides Amid Central Bank Tensions
The U.S. dollar declined against major currencies following President Trump's unexpected dismissal of Federal Reserve Governor Lisa Cook, raising concerns about central bank independence. Market reactions were mixed, with investors wary of potential politicization of policy and its impacts on interest rates and currency stability.
The U.S. dollar experienced a decline against key global currencies on Tuesday after President Donald Trump unexpectedly removed Federal Reserve Governor Lisa Cook. The move raised alarms about the central bank's independence, with the euro and the British pound gaining approximately 0.3% against the dollar.
President Trump's decision, attributed to alleged improprieties in obtaining mortgage loans by Cook, could test the limits of executive power over the Federal Reserve. In a statement, Cook asserted that Trump lacks the authority to dismiss her and that she will not resign her position.
Despite the surprise announcement, market reactions were relatively subdued due to ongoing concerns over the potential politicization of monetary policy. Analysts forecast a probable interest rate cut by the Fed in September, further influencing investor sentiment and currency markets.
(With inputs from agencies.)
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Trump fires Fed Governor Lisa Cook amid mortgage fraud allegations, opening new front in fight over central bank, reports AP.
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