Rising Concerns Over Fed Independence Could Trigger Dollar Sell-Off

Political Interference Concerns Rise

ING Bank's latest analysis highlights renewed concerns over the independence of the US central bank, following Federal Reserve Chair Jerome Powell's recent disclosure of a Department of Justice inquiry into headquarters renovation costs.

Strategist Francesco Pesole stresses that any attempt to influence Fed policy could significantly undermine market confidence in the dollar, potentially triggering large-scale capital flight.

Dollar Faces Downward Pressure

Market sentiment toward the US currency is shifting as skepticism grows about the neutrality of monetary policy decisions. If further signs of interference emerge, the dollar index may test critical support levels.

Analysts advise investors to closely monitor Federal Open Market Committee actions and Congressional statements to assess potential impacts on monetary policy independence.