#federal-reserve-independence

#federal-reserve-independence

The US dollar remained in a consolidation phase on Thursday, holding close to multi-week highs. Inflation data released on Wednesday painted a broadly stable picture. Producer prices increased moderately on the month. Taken together with earlier CPI data, inflation trends appear neither re-accelerating nor cooling decisively. Retail sales provided a contrasting signal, rebounding strongly in November. Improved consumer spending, suggesting household demand remains relatively healthy, limiting immediate downside risks to growth.

On Wednesday, the original cryptocurrency surpassed $97,000 for the first time in two months and is up more than 6% in the last week. The jump in Bitcoin came after Federal Reserve Chair Jerome Powell issued a remarkable statement that accused President Donald Trump's administration of directing a baseless criminal investigation at him in order to intimidate the agency. Meanwhile, the price of gold and other precious metals shot up as investors fled towards safe haven assets.

Yet, Monday came, and while gold and silver went vertical, equities stayed calm and the dollar barely drifted. To economist Tyler Cowen, the renowned libertarian from George Mason University and author of the influential Marginal Revolution blog, this lack of market panic is the most revealing part of the drama. It isn't that investors trust the administration's motives; it's that they have already accepted the "ugly little truth" that the Federal Reserve's independence is a relic of a bygone era.

The FTSE 100 appears to be faring best, benefitting from strong gains in the precious metals space and defence stocks. Notably, the weekend newswires told of a potential military deployment into Greenland from the likes of Germany and the UK in a bid to deter Trump's overtures for the island. While Trump's apparent willingness to take aim at land owned by a fellow Nato member does highlight the need for Europe to ramp up defence spending,

Lawyers with the justice department have issued subpoenas for the investigation, according to the Wall Street Journal. Last month, Trump moved to fire Cook over unconfirmed claims that she listed two properties as her primary residence. Bill Pulte, the director of the Federal Housing and Finance Agency and a close ally of Trump, alleged Cook had lied on bank documents and records to obtain a better mortgage rate.