Donald Trump Once again he criticized the head of the central bank, claiming that he should lower interest rates. The US President said on Thursday that if he wanted to, the president of the Federal Reserve Jerome Powell would leave the position very quickly. Trump claims that he has the right to release him.
On Friday, Kevin Hassett, an advisor to the US President for Economic, said Donald Trump and his team would analyze possible release of the head of the federal reserve.
Powell attacks increased the concerns about the independence of the federal reserve. According to analysts, they undermined investors' trust in American assets, which had previously been tarnished by Donald Trump's customs and his trade war.
See also: Trump thinks he has a way to leave the head of the fed. “Believe me”
As CNBC writes, in the face of these tensions, investors withdraw from American assets. The dollar continued the decline on Monday, reaching the lowest level from 2022.
Investors run away from American assets
The ICE American dollar index, which measures the value of the dollar in relation to the basket of foreign currencies, fell on Monday to 97.92. According to FactSet, this is the lowest index level since March 2022.
The dollar has weakened since the inauguration of President Donald Trump in January. The introduction of customs on April 2 stimulated the next round of the sale. The last criticism of the chairman of the federal reserve seems to exert even more pressure on the US dollar.
“We see a clear signal from the market that he doesn't even like the idea that the president could try to remove the FED chairman. In recent weeks there has been a certain decrease in trust in American economic policy,” said Krishna Guha, vice president of Evercore ISI, on Monday at “Squawk Box”, quoted by CNBC.
She added that we saw upward pressure on the profitability of bonds in conjunction with the weaker dollar, which suggests that global investors withdraw their capital from the USA.
Donald Trump wants to “turn Washington upside down”
“We are dealing with a president who is determined to turn Washington upside down. Investors who ignored the words of Trump himself, announcing the higher tariffs, suffered damage by doing so. Similarly it would be a mistake to ignore the words and actions of Trump himself in these other issues,” wrote Laperrier Andy LAPERRIE, head of US politics at Piper Sandler, quoted by Piper Sandler, quoted by Piper Sandler CNBC.
American assets have achieved better results over the past decade than the rest of the world, which stimulated the growing demand for dollar. However, action and bond markets in the US fell during a tariff deadlock between Trump administration and other foreign leaders, which apparently resulted in a decrease in the value of the dollar.
On Monday, several currencies, which gained the most in relation to the dollar during this period, were more expensive again. Euro gained 1.3 percent In relation to the American dollar, while Japanese Jen and Frank Swiss also gained value.
Source: CNBC, Business Insider Polska
