Trump’s Fed Attacks Risk Policy Lag and USD Weakness

President Donald Trump's escalating criticism of Federal Reserve Chair Jerome Powell threatens to undermine the central bank's independence at a precarious moment for monetary policy. The administration's unprecedented legal MOVE to remove Governor Lisa Cook signals a dangerous politicization of rate-setting decisions.

Market analysts warn this interference could force the Fed into reactive, data-dependent stances rather than forward-looking guidance. "Political pressures make it tough to credibly shift to an overtly dovish footing," notes Lloyds Bank's Nicholas Kennedy, suggesting delayed responses may accelerate dollar depreciation.

The brewing constitutional crisis over Fed governance coincides with mounting volatility across currency markets. Traders are pricing in prolonged policy uncertainty as TRUMP tests the boundaries of central bank autonomy - a scenario that historically benefits non-sovereign assets.