As Trump’s Conflict With the Fed Intensifies, Global Markets Fall
Following President Donald Trump’s announcement on Tuesday that he was dismissing a Federal Reserve governoran unprecedented step that heightened investor fears about the Fed’s independence long-dated US Treasuries and stock futures plummeted. As it became more likely that its minority administration would be overthrown next month, French stocks and bonds also fell, heightening the possibility of fresh political unrest in one of the largest economies in the euro zone.
With attention on US markets following Trump’s announcement that he was dismissing Lisa Cook from the Fed’s board of directors due to alleged irregularities in getting mortgage loans, global stocks somewhat retreated from this month’s record highs. She “had no intention of being bullied to step down” from her post, according to Cook.
In addition to Trump’s renewed threats of tariffs on trading partners, gold prices reached a two-week high, US equity futures declined, and the currency was weakening. As the US president’s most recent attack on the Fed clouded the picture for Fed policy, Europe’s broad STOXX 600 index was down 0.8% and Japan’s Nikkei finished down nearly 1%.
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