BlockBeats News, January 16th, according to the Financial Times, the US Department of Justice has launched a criminal investigation into Federal Reserve Chairman Powell, triggering global central banks’ concerns about the compromised independence of the Federal Reserve. This not only concerns the direction of US monetary policy but also directly threatens a key crisis tool of the global financial system — currency swap agreements.
Swap agreements are a core mechanism through which the Federal Reserve provides dollar liquidity to other central banks during crises, having served as a “financial lifeline” from the global financial crisis to the pandemic. However, the Trump administration’s pressure on the central bank has raised concerns that such tools might become politicized.
European officials discussed establishing alternative arrangements last year, reflecting a growing awareness among countries that their reliance on dollar liquidity could be weaponized. Analysts point out that if the US were to link swap agreements to geopolitical interests, the global crisis response capacity would face a severe test.
