FX Daily: Assault on the Fed poses significant downside threats for the USD
Dollar's Rally Disrupted by Legal Threats to Fed Chair
The dollar’s recent upward momentum came to a sudden halt overnight following news that Federal Reserve Chair Jerome Powell received grand jury subpoenas from the Justice Department. These subpoenas raise the possibility of criminal charges related to his statements about renovation projects at the Fed’s main offices. Powell has openly described this move as a direct challenge to the central bank’s independence, particularly in the context of the Trump administration. Financial markets initially echoed this concern, with declines seen across the dollar, stock markets, and Treasury bonds—evoking memories of last spring’s broad “sell America” sentiment. Despite this, Treasury futures...
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