US dollar hits 4-year low
The U.S. dollar has hit a four-year low on the back of tariff uncertainty and Fed interest rate cuts.
A day after announcing his nomination to be the next Federal Reserve chairman, President Donald Trump joked that he might sue the person if they didn’t lower interest rates, according to multiple reports.
The joke took place at a dinner that many reports characterized as a “bipartisan” audience, including members of the political, business and military worlds. Asked about the joke afterward, Trump told reporters the dinner had been a “buzz” and said he expected his candidate, Kevin Warsh, to cut rates.
But the joke comes at a tense time for central banks. That’s because Trump has been in Trump’s crosshairs ever since he was inaugurated for a second term in January 2025.
The Trump White House has filed criminal charges against current Speaker Jerome Powell and attempted to fire one governor, Lisa Cook. Cook’s case reached the Supreme Court in January, but the justices appeared skeptical of the president’s claims. Mr. Powell then took the unusual step of recording a video presentation in which he said the criminal charges related to cost overruns on construction projects were an excuse.
“This is a question about whether the Fed can continue to set interest rates based on evidence and economic conditions, or whether monetary policy will instead be dictated by political pressure and intimidation,” Powell said.
The central bank is an independent institution, and leading economists, analysts, politicians and former Fed officials have warned that Trump’s efforts to influence policy, including targeting its members, are dangerous.
Additionally, many professional economists and investors have said that former Fed director George Warsh may not be as amenable as Trump expects. Sources previously told USA TODAY that one of Warsh’s main concerns is controlling inflation. The Federal Reserve’s primary means of achieving that is to manage interest rates by raising them rather than lowering them.
Some economists worry that inflation could flare up again this year, in part due to tax cuts passed into law in 2025.
