FED CRISIS
A bombshell dropped: Fed Chair Powell accuses the President of pressuring him to cut rates for political reasons. This is HUGE because Fed independence is the backbone of the US dollar's strength and global trust.
What's happening?
- Prosecutors subpoenaed Fed HQ renovation project docs
- Powell says it's about forcing rate cuts, not just a building
- Markets reacted: dollar weakened, gold & assets pumped
Why this is a BIG DEAL:
The US dollar's strength isn't just about the economy; it's about trust in the Fed's independence. If that trust cracks:
- Currency confidence drops
- Inflation expectations rise
- Trust in the US dollar erodes
Two paths forward:
1. Liquidity Boom (short-term bullish):
- Fed caves, cuts rates → weaker dollar, easier money, higher asset prices
- Politics = QE (quantitative easing) by another name
2. Credibility Break (long-term danger):
- Fed loses independence → dollar weakens, inflation rises, higher borrowing costs
- History shows: political pressure → short-term high → long-term pain (1970s inflation, anyone?)
The stakes are high. Will the Fed hold firm or cave?
#FedCrisis #USDollar #Inflation #RMJ_trades