Trump’s Potential Dismissal of Powell Sends Shockwaves
Reports of Donald Trump considering the removal of Jerome Powell, the Federal Reserve Chairman, have sparked tensions in the markets. The dollar has plummeted, Bitcoin has crossed the $87,000 threshold, and gold has reached a new all-time high. The markets perceive this attack on the central bank as a direct threat to its independence, which has been a cornerstone of economic stability in the United States for decades.
Explosive Announcement Rocks the Markets
The alleged attempt by Donald Trump to dismiss Jerome Powell, the Federal Reserve Chairman, has caused upheaval in the markets. The dollar has collapsed, Bitcoin has soared past $87,000, and gold has set a new record. The markets interpret this offensive against the central bank as a direct assault on its independence, a fundamental principle of economic stability in the United States for decades.
Bitcoin and Gold Respond to Political Instability
Bitcoin has appreciated by over 3.5%, reaching $87,700, its highest level since April 2nd. This increase comes after several days of fluctuation between $83,000 and $87,000. Meanwhile, gold has surged to $3,382 per ounce, with a yearly performance of +28%. These two assets, often seen as safe havens during institutional instability, reaffirm their role in the face of American political uncertainty.
Altcoins have followed timidly: Ethereum and SOL have recorded respective gains of about 3% and 1%, but still lag behind the resilience of BTC.
The Dollar at Its Lowest Level in Three Years
The Dollar Index (DXY) has dropped to 98.5, a level not seen since April 2022. Over the course of three months, it has experienced a 10% decline. This downward trend intensified after comments by Kevin Hassett, Director of the National Economic Council, on Friday, suggesting Trump’s desire to end Powell’s tenure. As a result, hedge funds have massively sold off the greenback against the euro, yen, and Australian dollar.
Markets Worried About the Future of Monetary Policy
The Bitcoin breakout may be linked to this loss of confidence in the Fed. Indeed, the climate remains tense, especially since Jerome Powell, cautious about the risks of stagflation, recently stated that the Fed would wait for more economic data before making any rate adjustments. This measured stance contrasts with Trump’s repeated calls for swift rate cuts.
A Governance Crisis that Redefines Asset Classes
The resurgence of a political confrontation between the White House and the Fed could fundamentally reshape the market landscape. Gold and Bitcoin appear to be established as barometers of distrust towards traditional institutions. Meanwhile, S&P 500 and Nasdaq futures are declining, signaling growing risk aversion in the stock markets. The political shockwave may only be the beginning.
