Trump vs Powell: A battle that could shake global economics

Stephen Grootes speaks to Sanusha Naidoo, Senior Research Fellow at the Institute for Global Dialogue, on the Justice Department’s move against Federal Reserve Chair Jerome Powell over his congressional testimony.

Listen to the interview in the audio player below.

Tensions between U.S President Donald Trump and Federal Reserve Chair Jerome Powell have once again drawn attention to the fragile boundary between politics and monetary policy, with implications far beyond the United States.

Trump has repeatedly criticised Powell for keeping interest rates “too high” and has pushed for looser monetary policy to stimulate growth. Powell has consistently defended the Federal Reserve’s independence, stressing that policy decisions are guided by data, inflation risks and long-term economic stability.

For global markets, the stakes are high. The U.S dollar remains the world’s dominant reserve currency, and Federal Reserve policy influences borrowing costs, capital flows and exchange rates across both developed and emerging economies.

Any perception that political pressure is shaping Fed decisions could undermine confidence in U.S monetary credibility. That, in turn, could lead to higher risk premiums, greater market volatility and a weaker dollar, with outcomes that would ripple through global trade and financial systems.

Speaking to Stephen Grootes on The Money Show, Sanusha Naidoo, Senior Research Fellow at the Institute for Global Dialogue says emerging markets are particularly sensitive, with South Africa not immune to being affected.

"He's also made a few posts on his social media platform where he's now threatened BRICS countries to not use their currencies of localised payments, you stick to the dollar."

- Sanusha Naidoo, Senior Research Fellow - Institute for Global Dialogue

"The dollar in a sense is losing its value proposition as the global reserve currency, because gold has now spiked to over $4,000 an ounce. The other precious metal that's spiking an is actually going to have an incredible impact is silver..."

- Sanusha Naidoo, Senior Research Fellow - Institute for Global Dialogue

"He wants a dollar that can actually be transactionable, but he also wants the world not to start to use alternative or start to use localised payments."

- Sanusha Naidoo, Senior Research Fellow - Institute for Global Dialogue

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