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The US dollar (DX=F, DX-Y.NYB) and Treasury yields (^TYX, ^TNX, ^FVX) are under pressure as markets consider the fallout from President Trump's threats to fire Federal Reserve Chairman Jerome Powell.
Michael Goosay, Principal Asset Management's chief investment officer of global fixed income, joins Morning Brief to discuss what a potential firing could mean for investor confidence and the bond market's safe-haven status.
To watch more expert insights and analysis on the latest market action, check out more Morning Brief here.
It's time now for today's strategy session. The US dollar and treasuries selling off in tandem as investors assess the economic risks, President Trump's threats to fire Fed chair Jerome Powell. With the bond market's safe haven status in question amid risks to the Fed's independence, joining us now Michael Guse, principal asset management, chief investment officer of Global Fixed Income. Michael, great to have you on here. Just to get a sense, we understand the legal pushback, we understand that the Trump administration has been pushing for and investigating a way to fire a Fed chair previously and they haven't been able to find a way. But hypothetically, how bad would a firing of the Fed chair be for financial markets?
Good morning, and thank you for having me. Uh it would be bad. Uh there's no doubt that the uncertainty that already exists with regards to tariffs, how that plays out in terms of growth prospects going forward are undermining some of the, uh, some of the markets that that were just referenced. Uh certainly as we, if we go forward and start to think about, you know, just the overall security and trade apparatus that have been dominated by the US for the last 40 or 50 years coming into question, you're seeing that undermining the value of the US dollar. If the independence of the Fed, which is ultimately what you're talking about, comes into question and is actually realized, I think that would further put downward pressure on the confidence that foreign investors have in investing in US dollar assets.