Trump's Powell Remarks Spark Euro, Gold Surge; Fed Independence at Stake
Recent remarks from US President Donald Trump about the potential dismissal of Jerome Powell, the head of the US Federal Reserve, have stirred up the currency markets. The euro has responded, reaching a high of 1.1573 dollars before settling just below 1.15 dollars. Meanwhile, the price of gold has surged to $3,417 an ounce in New York.
The speculation about Powell's dismissal comes as the Fed's assessments indicate persistently high inflation, contradicting Trump's demands for lower interest rates to boost the stock market today. Trump has openly expressed his displeasure with the Fed's policy, further fueling uncertainty.
Kevin Hassett, director of the US National Economic Council, hinted that Trump is considering replacing Powell. Potential successors include Kevin Warsh, Christopher Waller, and James Bullard, with Bullard showing strong interest in the position. A change at the helm of the Fed could shake confidence in the US economy and cause further turmoil in global financial markets.
The independence of the Fed is seen as vital for the stability of the US economy. Austan Goolsbee, president of the Federal Reserve Bank of Chicago, emphasized this importance. However, the European Central Bank has not set new reference rates for the euro due to a holiday, adding to the market's uncertainties.
Despite the uncertainties, the euro has gained against the US dollar. The price of gold has also seen a significant increase, reaching $3,417 an ounce. The potential dismissal of Jerome Powell and the subsequent impact on the US economy and global financial markets remain key factors to watch in the coming days.
