The pound briefly hit its highest level against the dollar for nearly four years, as the markets were uncontrolled by a report that US President Donald Trump could bring forward the naming of the new head of the US Central Bank.
Sterling rises above $ 1.37, the strongest since October 2021.
Wall Street Journal reported that Trump had considered the replacement of Geom Powell as head of the Federal Reserve by September or October.
The US Fed is independent of the government and Mr. Powell presides over a committee, which decides on interest rates this year, which remains unchanged this year, which leads to a series of angry resentment from Trump.
On Wednesday, Trump called Mr. Powell “terrible” and said that he was looking at “three or four people” who could replace him. Mr. Powell’s term is due to ending in May 2026.
There are concerns that the US President can establish a person who is sympathetic to his demands.
Earlier this week, Mr. Powell told the US MPs that the fed would wait and see how the American economy reacts if the next month was implemented against Trump’s so -called anti -anti -anti -tariffs against several countries, after stopping until July 9.
The fed is concerned that the levy, which are paid by the goods importing businesses, may increase inflation.
The American economy shrunk in the first three months of this year – the first decline for three years – as the government spending fell and came into import as the firms raced to get products in the country before tariffs were live.
Investment bank, JP Morgan, has reduced the possibility of falling into the recession of the US economy this year, but the possibility of recession at 40% remain comparatively more.
Kasper Hanes, a senior portfolio manager of RBC Blue Asset Management, said that traders will fall in this environment “in this environment where there is erosion of institutions”.
While the chief FX strategist Kit Jake of the Society Zenrel said: “I think the market is appointing someone in President Trump who looks more sympathetic to his reason at least at least at first sight.”
Educationists have said that Confidence in Fed’s freedom is important to maintain the confidence of financial markets That inflation will be controlled.
If this belief is shaken, it can cause more borrowing costs for all if investors demand high interest rates to keep loans.
There is speculation that Kevin Wars, a former governor of the Fed, may be considered for the role.
Earlier this month, Trump was asked if Wars could become a chair of Fed, for which he replied: “He thinks too much.”
According to reports, American Treasury Secretary Scott Besant can also be a candidate.
He recently told the MPs in the House of Representatives that he currently has a “best work” in Washington and “President Trump is happy to do what I want to do”.
Mr. Powell himself was a Trump appointment. During Trump’s first term at the White House, Mr. Powell replaced the then Fed Chair Janet Yellen.
Trump criticized Ms. Yalen to keep the interest rates very low, stating: “I think she should be ashamed of herself.”
Ms. Yellen became the President of the President Joe Biden and under the US Treasury Secretary and Said that he did not think that Trump had an understanding of macroeconomic policy.
