Powell Drama Pressures Dollar
The US Dollar Index (DXY) weakened on Monday as market concerns about the Federal Reserve's independence grew. In recent trading, the DXY was hovering around 98.74 (down ~0.40%), after last week's rally began to lose steam.
Pressure on the dollar intensified following reports that the US Department of Justice (DOJ) issued grand jury subpoenas in a criminal investigation into Fed Chairman Jerome Powell's Senate testimony regarding the central bank's $2.5 billion headquarters renovation project. Powell responded via video statement, calling the move institutional pressure that could potentially undermine the independence of interest rate policy.
On the political front, White House economic adviser Kevin Hassett said he respects the independence of the Fed and the DOJ and claimed not to have participated in the investigation. However, he also highlighted the issue of ballooning renovation costs as a reason why the DOJ probe is "appropriate."
Looking ahead, the market awaits a series of key US data—particularly the CPI—to gauge whether inflationary pressures have eased enough to open up room for further interest rate cuts this year.
Source: Newsmaker.id
