In early 2026, the global financial markets experienced a fierce upheaval. The escalating policy conflict between the Trump administration and the Federal Reserve triggered a chain reaction: the US dollar index plunged through the 98.82 level, marking the largest annual decline in nearly nine years; US stock futures tumbled, with Nasdaq futures dropping over 0.9%; more notably, gold prices soared to $4601.38 per ounce, setting a new record.

The story behind this is not simple. The Trump administration exerted pressure on the Federal Reserve, attempting to push for rate cuts. In addition to criminal investigation pressures, it bypassed the central bank to introduce "Mortgage QE," enforced credit card rate caps, and directly interfered with the independence of the central bank. The Federal Reserve faced internal chaos, with policy implementation paralyzed.

Market reactions were swift and intense. Within a week, the Bank of Japan sold over $20 billion in US Treasuries, and global capital rapidly fled dollar assets. Institutions like BlackRock and Lazard quickly adjusted their positions, and JPMorgan warned that the dollar and US Treasuries face ongoing pressure. Meanwhile, Asian stock markets defied the trend, attracting capital, while gold and other safe-haven assets became new destinations for capital inflows.

History offers important lessons. Nixon-era aggressive economic interventions ultimately led to a decade of stagflation. Today, the US economy remains weak—non-farm payrolls weaken, unemployment rises—and if there is another forced intervention in interest rates, the risk of repeating past mistakes cannot be ignored.

A deeper issue is that this power struggle is actually undermining global trust in the dollar. The European Central Bank has openly stated that these policy maneuvers are destroying the dollar’s dominant position in the international system. Global capital is reallocating assets, with gold, commodities, and emerging market assets becoming new directions for investment.

The key question now is: can the dollar’s depreciation trend be reversed? Does breaking through $4600 in gold mean a larger restructuring of the monetary system? How will global liquidity be redistributed? These changes are worth monitoring for their impact on crypto asset allocations.