The latest drama between Trump and the Federal Reserve has reignited market concerns

Ipek Ozkardeskaya, an analyst at Swissquote, said Mr. Trump's sacking of Lisa Cook, the Fed governor, had put markets on edge and halted the dollar's rally because of expectations that Mr. Cook would be replaced by a stubborn rate-cutter. Mr. Cook has been outspoken about the impact of tariffs on inflation, saying they could push up prices and force policymakers to keep interest rates higher for longer, complicating the Fed's work. The drama of Mr. Cook's sacking has revived concerns about the Fed's independence, which in turn has undermined confidence in the US. The steepening of the Treasury yield curve reflects the belief that short-term rate cuts will lead to higher long-term inflation.