Last night, the financial markets experienced a shocking moment: the dollar index suddenly plummeted, gold surged by $30 in a short period, and the US stock market, which had been declining for several days, bizarrely rebounded. The trigger for all this was Trump's fierce remark, 'Fed Governor Cook must resign immediately!'
As an old hand in the crypto market, I dare say this is far from an ordinary political farce. Trump's accusation of 'loan fraud' precisely strikes at the Fed's Achilles' heel: its independence. Who is Cook? He was personally nominated by Biden in 2022, and his term lasts until 2038, a core figure in the Democratic camp. And the leaker, Pulte, is no ordinary figure; this Trump loyalist dared to challenge Fed Chair Powell back in July, accusing him of 'misleading Congress' on the headquarters renovation project. Now, targeting two core officials consecutively, it's clear to the discerning that this is a premeditated 'political purge.'
More critically, it is the legal battle. According to US law, the president must prove 'misconduct or serious impropriety' to dismiss a Fed governor, but Cook's alleged 'violation' occurred in 2021, before he took office. Legal experts generally believe this reasoning is absurdly weak, and the Supreme Court just emphasized this year that the Fed is a 'special semi-independent agency.' Trump, however, stated, 'Consider dismissal if he does not resign,' which is no longer pressure but a blatant test of power.
The market's reaction has already explained everything. The dollar's plunge is essentially a 'depreciation of central bank credibility.' When the Fed's policies may become political tools, the dollar's status as a reserve currency will inevitably be impacted. The surge in gold and the rebound in US stocks may seem like speculation on interest rate cuts, but they actually reveal a deeper fear: if even governors can be purged for political stance, who among other Fed officials would dare to voice hawkish remarks? Last week, Trump criticized Goldman Sachs' CEO to 'go back to being a DJ,' silencing Wall Street. Now, with the gun aimed at the Fed, future monetary policy may be forced to 'automatically tilt dovish,' even if inflation data doesn't agree.
Don't forget the recent sudden resignation of another Fed governor, Kugler. Now, what are these 'personal reasons'? This is clearly a precursor to a power reshuffle. For the crypto market, this signal is more important than any non-farm data: a damaged Fed independence means a loosening of the monetary policy anchor, and expectations for liquidity easing will be infinitely magnified. Bitcoin’s small rise against the trend last night was precisely smart money positioning itself in advance for this 'long-term dovish' expectation.
The next two days of the Jackson Hole conference will be crucial. Will Powell's speech be influenced by political pressure? Did Trump choose this moment to strike because he had already anticipated that Powell would send a hawkish signal? As crypto investors, we must not only focus on the K-line but also closely monitor the direction of this power game. When the independence of central banks begins to fade, assets like gold and cryptocurrencies that are considered 'anti-political risk assets' may face a new round of revaluation.
Follow me, tonight in the live stream we will discuss in detail: Will this Federal Reserve crisis be the catalyst for Bitcoin to break $40,000? Share your thoughts in the comments section, and I'll draw three fans to send the latest Federal Reserve policy interpretation report!
