The US dollar weakened and gold prices rose after President Donald Trump announced he is firing Federal Reserve Governor Lisa Cook, raising fresh concerns about the Fed’s independence.
A dollar index slipped 0.3% before trimming losses, while gold gained 0.5%. The Japanese yen led gains against the dollar, and Asian stocks fell 0.6%. Futures for the S&P 500 dipped 0.2%.
Bond markets reflected expectations of a Fed rate cut, with two-year Treasury yields falling and 30-year yields rising, highlighting inflation worries.
Analysts said Trump’s move could reshape the Fed’s board. “If Trump succeeds, he could potentially have four members aligned with his views,” said Rodrigo Catril, strategist at National Australia Bank. “That raises questions over Fed independence.”
Trump’s action follows a Department of Justice probe into Cook over alleged mortgage fraud, after a referral from the Federal Housing Finance Agency. Cook has previously rejected calls to resign, saying she had “no intention of being bullied.”
Markets are bracing for more volatility as Trump’s policies, including tariffs and tighter scrutiny of Democratic officials, continue to weigh on investor sentiment.
Market Snapshot (as of 10:42 a.m. Tokyo time)
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Stocks: S&P 500 futures -0.2%, Japan’s Topix -0.9%, Hang Seng -0.4%
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Currencies: Dollar index -0.2%, Euro $1.1641 (+0.2%), Yen 147.32 (+0.3%)
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Bonds: US 10-year yield 4.29% (+2 bps)
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Commodities: WTI crude $64.46 (-0.5%), Gold $3,375.73 (+0.3%)
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Crypto: Bitcoin $109,705 (+0.1%), Ether $4,394 (+1%)
