Investors got a look at a world where the dollar isn't a reliable reserve currency and decided they didn't like it

Markets sold off worldwide after President Trump announced plans to fire Fed governor Lisa Cook and threatened steep tariffs on China, raising fears about Fed independence and the dollar’s role as a reserve currency. S&P futures were down this morning. However some hopes emerged as investors focused on the Fed’s institutional strength.

There was a global selloff in the markets today and every major index—U.S. futures, Asia, and Europe—was down this morning. Two major factors drove the negativity: President Trump’s announcement last night that he will fire U.S. Federal Reserve governor Lisa Cook, thus calling into question the economic independence of the world’s most important central bank; and Trump remarking that he may impose 200% tariffs on China if Beijing restricts U.S. access to supplies of rare earth minerals that are 90% controlled by China.

The result: Investors got a look at a world where the dollar is no longer a reliable reserve currency, and decided they did not like it.

S&P 500 futures were sharply down this morning but made a recovery before the opening bell in New York. That recovery appears to be based on hopes that even if Trump gets his way in replacing Cook, the Fed is an institution strong enough not to bend to Trump’s will with large, sudden cuts to the interest rate.

https://finance.yahoo.com/news/investors-got-look-world-where-105757398.html