On August 25, U.S. President Trump publicly released a letter on his social media platform Truth Social announcing the immediate dismissal of Federal Reserve Governor Lisa Cook.

Previous analysis suggested that if Cook were to leave, Trump could potentially gain four seats, bringing him closer to "controlling the Federal Reserve."

As markets widely expected Trump to appoint a more dovish replacement for Cook, the news triggered a broad weakening of the U.S. dollar, falling short-term Treasury yields, and increased demand for safe-haven assets including gold and Bitcoin.

Analysts generally believe this move undermines market confidence in America's core financial institutions and could pose long-term challenges to the dollar's global reserve currency status. Investors are reassessing risks in U.S. markets and turning toward traditional safe-haven assets like gold and Japanese yen, as well as cryptocurrencies.

**Federal Reserve Independence Alarm Sounds**

Trump's action has once again ignited external doubts about Federal Reserve independence.

IG Markets analyst Tony Sycamore noted:

"Following last week's pressure from Trump on Fed Chair Powell that led to the latter's capitulation, Trump's dismissal of Cook again raises questions about Fed independence and further undermines the Fed's ability to maintain impartial monetary policy free from political influence."

CAPITAL.COM senior financial markets analyst Kyle Rodda stated bluntly:

"What's concerning is the Trump administration's intent: it's not about preserving Fed integrity, but about installing Trump's own people at the Fed."

"This comes back to the question of institutional trust... this is another crack in the edifice of America and its investability."

Mizuho Securities Chief Strategist Shoki Omori expressed similar views:

"This looks bad. The Fed no longer appears to be an independent institution. Loss of confidence in the Fed could also lead to loss of confidence in the dollar."

State Street Bank Tokyo branch manager Bart Wakabayashi was even more direct:

"All of this, including tariff policies, is another reason why America cannot be trusted."

"No stability, no credibility. And this is precisely what made America the world's safest investment foundation. If you're a responsible investor, this makes you pause and think."

**Dollar Under Pressure, Safe-Haven Assets Gain Favor**

Regarding asset impacts, beyond concerns over damaged Fed independence, markets also widely expect the White House to nominate a more dovish candidate to fill the vacancy, both factors directly bearish for the dollar.

OCBC foreign exchange strategist Christopher Wong said Trump's move represents "another example of Fed independence concerns weighing on the dollar" and could lead to more dovish members on the Federal Open Market Committee (FOMC), thereby "increasing expectations for rate cuts and dollar weakness."

Commonwealth Bank of Australia foreign exchange strategist Carol Kong believes dismissing Cook is just another attempt by Trump to influence FOMC decisions. She stated:

"The decline in the dollar against other major currencies clearly shows this development is negative for the dollar, as it creates a new opportunity for Trump to install another dovish governor on the FOMC committee."

Capital Economics Asia-Pacific Markets Head Thomas Mathews noted that while market reaction was relatively mild, it provides important clues for potential future scenarios:

"A steeper yield curve, higher long-end yields, weaker dollar."

Against this backdrop, demand for assets like gold, Japanese yen, and even Bitcoin is rising. Saxo Chief Investment Strategist Charu Chanana stated:

"Gold and the yen are rising as investors hedge not against a single dismissal, but against the long shadow it casts over Fed independence."

Kyle Rodda also clearly pointed out:

"This is positive for gold and will ultimately benefit Bitcoin as well."

**Market Has Not Fully Priced In Risks**

Despite swift market reactions, most analysts believe markets have not yet fully digested all potential risks, with future uncertainty remaining high.

Capital Economics Asia-Pacific Markets Head Thomas Mathews observed that the market's initial reaction was "quite mild," partly due to the timing of the news and uncertainty over whether Trump can successfully replace Cook. He believes:

"The real drama may emerge when he continues applying pressure after the easing cycle definitively ends."

Markets have already increased expectations for September and further rate cuts this year. However, Mizuho Securities' Shoki Omori warns that markets have not yet priced in "the possibility that Trump might target other Fed officials."