According to Mr. Trump, it was all Powell's fault, he did nothing.
The USD has just hit a 3-year low, causing shockwaves in the global financial market. The USD Index (DXY) fell to 97.92 points - the lowest level since March 2022. The main reason is the escalating tension between President Donald Trump and Federal Reserve Chairman Jerome Powell. Mr. Trump publicly criticized the Fed for being slow to cut interest rates and even hinted at the possibility of firing Mr. Powell - something unprecedented.
Political interference in the Fed has shaken investors' confidence in the independence of the US central bank. As a result, investors fled US assets, causing the USD to plummet. Instead of pouring money into the US dollar or US bonds – traditional safe haven assets – money is flowing into gold, causing the price of gold to increase by nearly 30% since the beginning of the year and reach a new peak of over 3,440 USD/ounce.
This situation raises big questions about the role of the US dollar in the global financial system. If the Fed loses its independence, confidence in the greenback could collapse quickly – something economists warn would have serious consequences for both the US and the world.
