By Shahab Jafry
Markets are still pricing calm, but could they be ignoring a storm. The attempt to fire Fed Governor Lisa Cook has become more than just another Trumpian tantrum. It signals a blatant willingness to weaponise the Federal Reserve, and that has consequences far beyond Washington.
When the independence of the world鈥檚 most influential central bank is compromised, the pricing of US debt, the stability of the dollar, and the structure of global capital flows all shift; and you can bet your bottom dollars that the tough guy behind this shock-and-awe understands this pretty well and simply does not care.
Needless to say, of course, that all this would not have been such a big deal if US economic/financial outlook didn鈥檛 (very) directly affect all global markets also; some directly, some with some lag.
For decades, the 鈥渇ull faith and credit鈥 of US institutions has underpinned the dollar鈥檚 role as the world鈥檚 reserve currency. That faith was not built on America鈥檚 size alone, but on the credibility of its sy