Gold strengthens after US President Donald Trump fired Fed Chair Lisa Cook
Gold prices rose +0.60% to $3,385 during the Asian session on Tuesday (August 26th). This news triggered demand for safe haven assets and heightened market concerns about political interference in the central bank. Mainstream media outlets such as Reuters and Axios reported the announcement of the dismissal on Monday evening, Washington time.
The White House said the move was based on "sufficient grounds" related to allegations of fraudulent mortgage documents. The allegations were previously made by FHFA Director Bill Pulte, who claimed Cook listed two homes as her "primary residence" to qualify for a cheaper mortgage. The dismissal letter was released directly by Trump, who said the decision was effective immediately.
This move is expected to trigger a legal dispute because the President's authority to dismiss a Fed Chair is not common practice and could potentially conflict with the central bank's independence. The Financial Times considered the decision a new escalation in tensions between the President and the Fed and could test the limits of existing law.
In the market, initial reactions indicate increased interest in safe-haven assets: gold rose while the US dollar weakened, reflecting cautious sentiment over the risks of politicized monetary policy. Investors will be closely monitoring the Fed's official response, potential legal action against Cook, and its implications for the future direction of interest rate policy. (ayu)
Source: Newsmaker.id
