TOKYO -- Shares sank Tuesday in Europe and Asia after President Donald Trump announced he was firing Federal Reserve Governor Lisa Cook.The announcement came after trading closed Monday on Wall Street, where benchmarks reversed some of their big gains from notched last week on hopes for interest rate cuts from the Fed.
Trump said in a letter posted Monday on his Truth Social platform that he was removing Cook because of allegations that she committed mortgage fraud.It's an unprecedented move that marks a sharp escalation in Trump's battle to exert greater control over what has long been considered an institution independent from day-to-day politics.Apart from rattling financial markets, it is likely to touch off an extensive legal battle that will probably go to the Supreme Court.“Trump’s decision to remove a sitting Fed governor has shaken confidence in the institution that underpins the world’s financial system,” Nigel Green of the financial advisory deVere Group, said in a commentary.“Investors are reacting because the independence of the central bank is critical to market stability, and any sign of political capture raises alarm bells everywhere.”In early European trading, Germany's DAX lost 0.5% to 24,148.16, while the CAC 40 in Paris slumped 1.6% to 7,716.55.
Britain's FTSE 100 gave up 0.6% to 9,269.40.The futures for the S&P 500 and the Dow Jones Industrial Average were 0.1% lower.In Asian trading, most benchmarks declined.
Japan's benchmark Nikkei 225 dove nearly 1.0% to finish at 42,394.40.Australia's S&P/ASX 200 declined 0.4% to 8,935.60.South Korea's Kospi lost 1.0% to 3,179.36 after data showed improved consumer sentiment, strengthening expectations that the central bank won't lower interest rates.
Hong Kong's Hang Seng shed 1.2% to 25,524.92, while the Shanghai Composite slipped 0.4% to 3,868.38.Popular ReadsNational Guard troops in DC are now armed: Defense officialAug 24, 5:57 PMAbrego Garcia coerced to take guilty plea or be ...