President Trump continues to criticize Fed Chair Jerome Powell for high interest rates, risking a deeper sell-off in the USD. Trump seeks a more dovish Fed aligned with his economic view of ultra-low rates. Trump’s appointee, Stephen Miran, pushes for rapid rate cuts, heightening pressure on Powell’s final term.

Trump’s administration seeks to remove Fed Governor Lisa Cook, a Biden appointee, challenging the Fed’s political independence. Powell faces the dilemma of succumbing to political pressure for rate cuts or appearing independent. Delayed rate cuts could deepen an economic slowdown, creating a Catch-22 situation for the Fed.

The Fed’s response to political pressure could lead to delayed rate cuts, exacerbating economic conditions and increasing market volatility. This could benefit dollar-denominated assets like gold and bitcoin, as the USD has dropped 10% this year while bitcoin has rallied by 24%, amid fears of a potential economic downturn.

Read more at Yahoo Finance: Trump’s Relentless Attacks on Fed May Deepen Policy Lag, Send USD Lower