The price of gold reached a historical maximum after the new attacks by Donald Trump rocked and the American scholarship and hit the dollar

The price of gold has set a new $ 3,500 record for an ounce Troy, while the dollar has been depreciated again against the background of US President Donald Trump to the head of the US Reserve (FED), the Washington Central Bank, Reuters, CNBC and Financial Times.

The price of gold has increased by 2.2%, and the Japanese yen strengthened over the threshold of 140 years for a dollar, for the first time in September, investors orienting themselves to the so-called “refuge”.

The New York Stock Exchange suddenly dropped Monday after Trump described Jerome Powell, the Fed president, as “too late” and “a big loser”, also asking the US Central Bank to reduce the “now” reference interest.

The criticisms launched by Trump on the Social Truth Social network they owns came after Powell warned that the extended customs duties imposed by the Republican Administration at the White House will lead to a slower increase in the US economy and a higher inflation for Americans.

Tensions between the US President and the Central Bank are a new challenge for investors who are already experiencing the effects of the aggressive commercial policy of the Washington Administration.

“The titles on the pressure exerted by Trump on the federal reserve, the questions related to its independence and the possibility of him to dismiss Powell-regardless of the result-they added uncertainty in a market already saturated with uncertainties,” the RBC analysts noted.

Trump's attack on Monday led to the S&P 500 decrease, the New York Stock Exchange Index, by 2.4%, while the NASDAQ index, dominated by the technological sector, decreased by 2.6%.

The dollar dropped 0.2% on Tuesday compared to a series of major currencies, reaching a decline of almost 10% since the beginning of the year.

Trump's comments arouse new concerns about Fed independence

Currently, the President of the FED and the other 6 members who make up the Council of Governors of the institution are nominated by the US president, and are then heard by the Senate for confirmation.

But Fed enjoys a substantial operational independence in terms of decision making that exert a huge influence on the Directorate of American Economy and Financial Markets around the world.

For example, one of the things that support the status of the dollar as a reserve currency of the world is the Fed ability to establish monetary policy without any political interference.

This status instead is key to the almost unlimited capacity of the US government to be able to borrow on international financial markets, despite the huge US public debt, currently 35 trillion dollars.

Investors and economists have warned since last year that a possible attempt by Trump to dismiss Powell before the end of his term in May 2026 could harm the American economy.

“Any decrease in FED independence would increase the risks up to the prospects of inflation, which are already affected by ascending pressures coming from rates and high inflationary expectations,” Michael Feroli, chief economist at JPMorgan Chase in August.

He launched the warning under the conditions in which Trump had stated at the time that he wanted “at least one say” in terms of certain FED policies, such as the level of reference interest.

Trump named Jerome Powell President of Federal Reserve

Powell, the current president of the EDD, was appointed by former Democrat President Barack Obama in the Board of Governors of the Central Bank.

Trump promoted Powell as president of the EDD in 2018, but he came into conflict with him shortly after he was named in office because of the decision to increase his interest during his mandate at the White House.

Among other things, the former president declared about Powell, during the election campaign last year, that he was trying to derail the American economy and at one point an “enemy of the people”.

In February last year the Republican candidate for the presidency said he would not nominate Powell for a new term if he becomes president again.

At the end of April last year The Wall Street Journal wrote for the first time that Trump's allies drafted a plan whose objective is to erode the independence of the federal reserve to provide more authority to the president in influencing monetary policy decisions.

At that time, Donald Trump's campaign team distanced from the plane in the press.

Economists remind of a worrying precedent

One of the ways in which the Presidential Administration would undermine the independence of the FED would be the nomination of a candidate for the position of president of the institution to implement the decisions desired by the president.

Such a move would need the confirmation of the Senate, but it would not require the change of the current legislation.

Economists remember a famous example in this regard. In the early 1970s, former US President Richard Nixon pressed Fed, Arthur Burns, who had appointed an expansionist monetary policy before the 1972 elections in order not to discourage consumption.

Burns has complied, despite the clues regarding the increase of inflationary pressures. Two years after election inflation in the US had reached over 12% and would remain a persistent problem for the rest of the decade.

The situation was brought under control only after Paul Volcker, the next president of the EDD, increased reference interest to crushing levels for the economy, which caused two separate recessions in the early 1980s.