Dollar, Treasuries and U.S. Equities Sink as Fed Attacked

“Sell America” sentiment rippled through markets after the Trump administration escalated its attacks on the Federal Reserve, fanning concerns over the central bank’s autonomy in setting interest rates, Ruth Carson, Abhisek Vishnoi and Winnie Hsu reported for Bloomberg News.

The sensitive issue of the Fed’s independence — and the implications for US markets — resurfaced in investor debates.

The dollar, Treasuries and US equity futures slid after Chair Jerome Powell said the threat of a US criminal indictment stemmed from a disagreement over monetary policy.

While the declines were relatively small, the sensitive issue of the Fed’s independence — and the implications for US markets — resurfaced in investor debates.

“Any development that raises questions about the Fed’s independence adds uncertainty around US monetary policy,” said Gary Tan, a portfolio manager at Allspring Global Investments, which oversees more than $600 billion.

“This is likely to reinforce existing trends of diversification away from the dollar and increase interest in traditional hedges such as gold.”

On Sunday evening, Powell said the US central bank had been served with grand jury subpoenas from the Justice Department related to his congressional testimony on ongoing renovations at the Fed’s headquarters.