Trump’s move to sack Lisa Cook stokes concerns over central bank’s independence.
The dollar weakened and traditional safe-haven assets advanced after President Donald Trump moved to oust Federal Reserve Governor Lisa Cook, stoking concerns over the central bank’s independence.
A gauge of the dollar retreated 0.3% before paring losses as Trump posted on his Truth Social account that Cook will be removed effective immediately.
Gold rose as much as 0.5%, while the yen led gains against the dollar among Group-of-10 currencies.
Asian stocks fell 0.6%. Futures for the S&P 500 dipped 0.2%. The Treasury curve steepened, with a drop in two-year yields reflecting growing speculation of a Fed interest-rate cut as soon as next month, while 30-year yields climbed on concern looser monetary policy would risk fueling inflation.
Traders have been seeking alternatives to the dollar, the world’s reserve currency, and Treasuries, and any perception of eroding Fed independence could accelerate that shift.
“Removing Cook increases concerns over Fed independence, assuming Cook has no legal recourse,” said Rodrigo Catril, a strategist in Sydney at the National Australia Bank.
