Although the Federal Reserve has been pressured by the White House in the past, this time its chairman's response is unprecedented. In a video released on 12 January, Jerome Powell denounced the direct pressure exerted by the Trump administration to obtain a massive interest rate cut.
This statement, which comes as the Federal Reserve chairman is being summoned by the Justice Department, marks a sharp break in the institution's tradition of autonomy.
For those involved in institutional finance, this is no longer just a question of monetary policy, but a challenge to the institutional bulwark that has hitherto protected the dollar from political arbitrariness.
The process of succeeding Jerome Powell confirms this paradigm shift.
The three favoured candidates to take over the reins of the powerful central bank (Kevin Hassett, Kevin Warsh and Scott Bessent) all display a willingness to make drastic rate cuts.
This inclination no longer appears to be a simple divergence of economic analysis, but is now akin to a precondition imposed by the White House. While equity markets traditionally welcome monetary easing with enthusiasm, this short-term view obscures a major structural risk: that of a Fed whose decisions are uncorrelated with economic fundamentals in order to serve an artificial stimulus agenda.
In a scenario where rates are lowered prematurely, the risk of an uncontrolled rebound in inflation would become a tangible reality. This prospect is already scaring the bond market, where investors could demand higher risk premiums, pushing up the long-term rates at which the US finances its deficit.
To contain this surge, the Fed would then have no choice but to intervene massively on the Treasury securities market, committing the institution to a policy of controlling the yield curve.
The consequences for the greenback would then be significant.
A dollar whose value is sacrificed on the altar of political growth loses its attractiveness as a reserve asset.
In this context of foreseeable depreciation of fiat money, the eyes of fund managers naturally turn to alternative reserve assets.
Gold, the historic refuge against currency erosion, and Bitcoin, whose scarcity is protected by code and not by decree, stand out as the main beneficiaries of this loss of institutional confidence.
For the informed investor, the current situation calls for heightened vigilance over the US risk premium.
If the Fed were indeed to lose its independence in favour of a policy of permanent monetary ease, we would be entering an era of heightened volatility for currencies.
Diversification into assets disconnected from Washington's decisions is then no longer a speculative option, but a capital preservation strategy in the face of a dollar whose very foundations are being rewritten.
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