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On Monday, the US dollar fell to its lowest level in three years, a reaction to President Donald Trump’s new wave of criticism of Federal Reserve Chairman Jerome Powell. Further pressure on the Fed threatens to undermine confidence in the independence of the US central bank.
According to Reuters, Trump called Powell a “big loser” on social media and called for an immediate cut in interest rates. His words caused significant turbulence in the FX market.
“Powell’s firing cannot happen fast enough,” the president said, reinforcing his position through his adviser Kevin Gassett, who confirmed on Friday that the White House is actively considering legal options for removing the Fed chairman.
On Monday, the dollar fell to 97.923 against a basket of major currencies, its lowest level since March 2022. The biggest losses were recorded against key currencies:
- against the Swiss franc – a fall of more than 1.5% to a 10-year low of 0.8063
- against the euro – the European currency rose to $1.1535, the highest level since November 2021
- against the Japanese yen – the dollar reached a seven-month low
Analysts point out that the key factors behind the decline were the trade war, uncertainty in Trump’s foreign economic policy, and the threat of political interference in the Fed’s work. All this prompted investors to withdraw capital from US assets, weakening the dollar.
The independence of the Federal Reserve is one of the fundamental values of US financial stability. But public attacks by the president could upset this balance, creating long-term risks for the global economy.
