Global shares tumble after Trump's Fed battle heats up

LONDON Long-dated US Treasuries and stock futures fell after Donald Trump said he was firing a Fed governor, an unprecedented move that fuelled investor concerns about the Fed's independence

- 

Long-dated US Treasuries and stock futures fell on Tuesday after President Donald Trump said he was firing a Federal Reserve governor, an unprecedented move that fuelled investor concerns about the Fed's independence.

French stocks and bonds also tumbled as its minority government looked increasingly likely to be ousted next month, raising the spectre of renewed political instability in one of the euro zone’s biggest economies.

World stocks edged off this month's record highs, with focus on US markets after Trump said he was removing Lisa Cook from the Fed’s board of directors, citing alleged improprieties in obtaining mortgage loans. Cook said she had “no intention of being bullied to step down” from her position.

Gold prices touched a two-week high, US equity futures fell and the dollar was on the backfoot, as Trump also renewed tariff threats on trade partners.

Japan's Nikkei closed down almost I per cent and Europe's broad STOXX 600 index was last down 0.8 per cent as the US president’s latest salvo on the Fed muddied the outlook for Fed policy.

“Since he took office, Trump has managed to get his way on most things he has turned his attention to,” said RBC BlueBay Asset Management Chief Investment Officer Mark Dowding. “In this context, it may seem reasonable for markets to conclude that he may end up getting his way with the Federal Reserve.”

In early London trade, the benchmark US IO-year Treasury yield rose 2.5 basis points (bps) to 4.30%, while 30-year bond yields rose 5 bps to 4.94%.