Trump Fires Fed Governor, Raises US Market and Policy Uncertainty

President Trump’s recent attempt to fire Federal Reserve Governor Lisa Cook has intensified concerns about the Fed's independence and potential political influence over U.S. monetary policy. This move, justified by Trump with allegations of mortgage fraud against Cook, has sparked legal challenges and uncertainty about the future direction of the central bank. Market responses have included a steepening yield curve, with long-term Treasury yields rising and short-term rates falling, reflecting fears of looser monetary policy that could increase inflation risks. Investors remain cautious amid these developments, alongside broader concerns about Trump’s administration potentially acquiring equity stakes in major companies like Intel and Lockheed Martin, signaling an unusual level of government intervention in the economy. At the same time, the dollar showed mixed performance amid these tensions, while major tech stocks awaited earnings results, highlighting the interplay between political decisions and market dynamics. Overall, the financial markets are closely watching how Trump's actions may reshape the Fed and impact economic stability.