Fed Governor Firing Shakes Markets: US Stocks Fluctuate, Gold and Silver Gain
President Donald Trump's firing of Federal Reserve Governor Lisa Cook unleashed a wave of uncertainty across global markets. This surprising decision sparked concerns about the independence of the US central bank, fueled stock market volatility, and impacted commodity prices such as gold, silver, and oil.
Following the announcement of the firing, major US stock indexes such as the S&P 500 and Nasdaq briefly came under pressure. Investors feared that monetary policy would be more influenced by political factors than economic data.
However, sentiment reversed after the market priced in an 87% chance of a September interest rate cut, according to CME FedWatch data. These dovish policy expectations typically benefit technology and growth stocks.
Precious metals immediately received a positive boost.
Gold remained near a two-week high of USD 3,368 per ounce, as the dollar weakened.
Silver strengthened about 0.3% to USD 38.94 per ounce, driven by a combination of geopolitical uncertainty and its appeal as a safe-haven asset.
The weakening US dollar index (DXY) was a major catalyst, making dollar-denominated commodities cheaper for global buyers.
Crude oil prices fluctuated. On the one hand, a weaker dollar supported price gains. However, concerns over political stability and a potential global economic slowdown limited gains.
Analysts believe that if expectations of an interest rate cut are realized, oil prices could potentially stabilize due to the boost in demand from the US economy.
Lisa Cook's dismissal was a catalyst for global market volatility. Political uncertainty prompted investors to shift portfolios to safe assets like gold and silver, while the stock market attempted to balance concerns with the prospect of looser monetary policy. Crude oil remains in a tug-of-war between risk sentiment and support from a weakening dollar.
Source: Newsmaker.id
