Financial Times: The Federal Reserve's independence is under threat, endangering the global financial "lifeline"
BlockBeats News, January 16, according to the Financial Times, the U.S. Department of Justice has launched a criminal investigation into Federal Reserve Chairman Jerome Powell, sparking global central banks' concerns over the chain risk of the Fed's independence being compromised. This not only concerns the direction of U.S. monetary policy, but also directly threatens a key crisis tool of the global financial system—the currency swap agreement.
Swap agreements are a core mechanism by which the Federal Reserve provides dollar liquidity to other central banks during times of crisis, having served as a "financial lifeline" multiple times from the global financial crisis to the pandemic. However, the Trump administration's pressure on central banks has raised concerns that such tools could become politicized.
Last year, European officials discussed establishing alternative solutions, reflecting the alertness of various countries to the possibility of dollar liquidity dependence being weaponized. Analysis points out that if the U.S. ties swap agreements to geopolitical interests, the global capacity to respond to crises will face a severe test.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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