The dollar held to its losses on Tuesday after the Trump administration opened a criminal investigation into Federal Reserve Chair Jerome Powell, a move that threatens the central bank’s independence and faith in U.S. assets.
Investors were still trying to come to grips with news of the probe revealed late on Sunday, a move that drew condemnation from former Fed chiefs and marked a dramatic escalation in the U.S. president’s campaign to pressure the central bank into cutting rates faster.
The market reaction has been to sell the dollar and U.S. Treasuries, while the unease also prompted some investors to seek safety in gold. However, the selloff was much more measured than the one that followed Trump’s sweeping tariffs last April.
“The episode was mild, with losses in both USD and USTs fractional, as markets probably believe this is an act of threat that will blow over,” said…
