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The US dollar and Treasuries weakened in Asian trading on Tuesday after President Donald Trump announced the removal of Federal Reserve Governor Lisa Cook, escalating concerns about central bank independence and rattling confidence in US assets. Trump’s Intervention Shakes Market Confidence Trump posted on his Truth Social platform that he had removed Cook on allegations of making false statements on mortgage applications. Her term, originally due to end in 2038, has now been cut short, potentially accelerating the president’s ability to reshape the Fed’s policy stance. The move underscores Trump’s increasingly combative relationship with the Fed. He has repeatedly threatened to fire Fed Chair Jerome Powell — though lacking the legal authority except “for cause.” Powell’s current term as chair expires in May 2026. “ There’s no credibility. That’s the basis of the US being the safest investment in the world. If you’re a responsible investor, it gives you pause, ” said Bart Wakabayashi, ...

The People’s Bank of China (PBOC) set the yuan’s daily reference rate at  7.1161 per dollar  on Monday, its strongest level since November and the biggest upward adjustment since January, after the greenback weakened on  Federal Reserve Chair Jerome Powell’s dovish Jackson Hole remarks . The fixing came in stronger than Friday’s  7.1321 , signaling Beijing’s intent to stabilise the currency even as macro headwinds weigh on growth. Market Reaction Onshore yuan (CNY):  Strengthened 0.1% to  7.1605/USD , its highest since late July. Offshore yuan (CNH):  Also gained, with FX traders interpreting the aggressive fixing as stronger-than-expected, given the modest USD weakness. Bloomberg Dollar Spot Index:  Fell 0.8% following Powell’s speech, reinforcing yuan momentum. However, the yuan still  weakened against a basket of peers , according to Bloomberg’s CNY index, underscoring that the move was primarily  USD-driven rather than a broad-based ...

  Fiscal Power Play Meets Monetary Pushback President Trump is entering full negotiation mode as he attempts to push through his landmark tax-and-spending bill ahead of the July 4th deadline. His involvement in negotiations is increasingly direct and aggressive — exerting political leverage over dissenters in the Senate and openly pressuring the Federal Reserve to lower interest rates. Market Relevance Legislative Timeline Risk:  Prolonged intraparty conflict could delay or dilute the fiscal package, introducing headline risk across Treasuries, equities, and USD. Fed Independence at Risk:  Public criticism and aggressive rate-cut demands from the President raise questions about the Fed’s autonomy — a factor that could add volatility to bond and FX markets. Macro Crosscurrents:  Elevated borrowing costs, surging debt service, and unresolved tariff threats create a complex policy landscape heading into H2 2025. Highlights & Strategic Signals Trump Turns Up the Heat...