Anti-Powell push spurs US assets sale

The sell-America trade gathered momentum yesterday on concern that US President Donald Trump will act upon his threat of firing Federal Reserve Chairman Jerome Powell.

- RUTH CARSON DAVID FINNERTY

The dollar and US stock futures dropped while Treasury 10-year yields climbed as investors weighed the risk of Mr Powell’s dismissal and its implications for the world’s largest economy. The selling intensified after National Economic Council Director Kevin Hassett said Friday that Trump was studying the matter, after a report said the president was exploring such a move.

The prospect of Mr Powell’s removal is dealing a fresh blow to US assets after Washington’s aggressive trade tariffs fanned fears of a recession and fuelled doubts about the status of Treasuries as the haven of choice. Trump has said a cheaper currency would make the nation’s products more competitive, adding to the pressure on the dollar.

“If the credibility of the Fed is called into question, it could severely erode confidence in the dollar,’ said Christopher Wong, strategist at Oversea-Chinese Banking Corp in Singapore.

The Bloomberg Dollar Spot Index fell as much as 0.9% yesterday to the lowest level since January 2024. The yen strengthened to a level last seen in September, while the euro rallied to the highest in more than three years.

The shared currency is now trading at around $1.15, close to the most bullish year-end forecasts from strategists. The yen, at around 140.50 per dollar, is stronger than the median year-end target of 143, Bloomberg data shows.