Financial Times: Fed Independence Threatens Global Financial ‘Lifeblood’
BlockBeats News, January 16th. According to the Financial Times, the US Department of Justice has launched a criminal investigation into Federal Reserve Chair Powell, triggering global central banks' concerns about the compromised independence of the Federal Reserve. This not only concerns the direction of US monetary policy but also directly threatens a key crisis tool of the global financial system—the currency swap agreement.
The swap agreement is a core mechanism through which the Federal Reserve provides dollar liquidity to other central banks during crises, having served as a "financial lifeline" from the global financial crisis to the pandemic. However, the Trump administration's pressure on the central bank has raised concerns that such tools may become politicized.
Last year, European officials discussed establishing alternative arrangements, reflecting countries' alertness to the possible weaponization of dollar liquidity dependence. Analysts point out that if the US were to link swap agreements to geopolitical interests, the global crisis response capability would face a severe test.
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