Fed Governor Removal Sparks Market Concerns

Selling pressure intensified after President Donald Trump removed Fed Governor Lisa Cook over allegations related to mortgages. Analysts view the move as a direct challenge to the central bank’s independence.

According to the Wall Street Journal, Cook pushed back against political pressure, stating she had “no intention of being bullied to step down.”

Market participants worry this action could influence the Fed’s decision-making, potentially accelerating interest rate cuts. While investors are not showing signs of panic, expectations for earlier easing are rising.

Rate Cut Bets Grow Ahead of September Meeting

The CME FedWatch Tool shows an 84% probability of a rate cut at the Fed’s September meeting, up sharply from 62% a month ago.

Fed Chair Jerome Powell’s remarks at Jackson Hole reinforced this outlook, noting risks tied to both inflation and a weakening labor market.

The combination of political interference and a dovish policy shift leaves the dollar vulnerable, with traders preparing for renewed downside pressure.