Gold climbs as political pressure grows on the Fed

Gold prices rise as political pressure on the Federal Reserve targets its independence amid a mortgage fraud probe involving a governor.

Gold Climbs as Trump Pressures Fed Independence

Gold prices rose on Wednesday after reports that President Donald Trump pressed Federal Reserve Governor Lisa Cook to resign amid allegations of mortgage fraud. Bloomberg and the Wall Street Journal described allegations that Cook falsified bank documents and property records to obtain more favorable loan terms, a charge that would challenge the Fed's independence and credibility.

The U.S. dollar slid slightly and Treasury yields fell as traders awaited the Fed's August minutes, initial jobless claims, and Jerome Powell's speech at Jackson Hole. Analysts warned that political pressure could complicate policy signaling and market expectations ahead of key events.

The episode shows how political heat can intrude on monetary policy and shake market trust. A credible central bank relies on consistent communication; when a governor faces serious allegations, traders may reprice risk before the facts are settled. The risk is not just headlines but the precedent that policy can be swayed by politics, which would complicate the Fed's task of guiding inflation and growth.

Looking ahead, the Jackson Hole gathering and the August minutes could become flashpoints. If officials push back on the idea that policy should stay separate from politics, markets might settle; if not, volatility could persist as investors seek clarity on the policy path.

Highlights

Credibility is the real price signal in unsettled times.