Trump Fires Fed Governor, Observer Warns Of The Impact Of Domino On The Indonesian Economy

JAKARTA - President Commissioner of HFX International Futures Sutopo Widodo stated that the impact of Donald Trump's decision to fire Federal Reserve (The Fed) Governor Lisa Cook on charges of mortgage loans could be felt by Indonesia.

According to him, uncertainty in the United States financial market could encourage foreign capital withdrawals from developing countries, including Indonesia, so this risks reducing the Rupiah exchange rate and weakening the Composite Stock Price Index (JCI).

Furthermore, he explained that if global investors become more careful and switch to assets that are considered safer, then the cost of loans for both companies and the Indonesian government has the potential to increase.

"Therefore, Trump's move is not only a domestic issue of the US, but also has the potential to cause a domino effect that can test national economic resilience in the face of global market instability," he told VOI, Tuesday, August 26.

Sutopo stated that Donald Trump's decision to fire Federal Reserve (The Fed) Governor Lisa Cook on charges of mortgage loans has the potential to cause significant turmoil.

"This action directly erodes the independence of the Fed, a fundamental pillar in maintaining global financial stability," he said.

According to him, by replacing a governor who has a long term, Trump can be considered trying to enforce monetary policy under his political control, especially to maintain low interest rates.

He conveyed that this could trigger the market and increase investor confidence, both at home and abroad.

"The main concern is that a politically biased monetary policy could threaten the credibility of the US dollar, which risks triggering volatility in the global market and having a negative impact on asset prices," he said.