Lead: On September 3, 2025, President Donald Trump renewed public attacks on the Federal Reserve, a move traders say has strengthened bets that the Fed will cut interest rates soon and helped push gold above $3,500 an ounce, extending a three-year bull run.
Key Takeaways
- Gold rose past $3,500 an ounce this week as markets priced in earlier rate cuts.
- Traders link the move to heightened political pressure on the Federal Reserve from President Trump.
- Central bank purchases and safe-haven flows have supported a multi-year gold advance.
- Markets now weigh higher inflation risk, weaker investment, and reduced confidence in US policy institutions.
- The rally highlights potential spillovers to bonds and equities if policy uncertainty persists.
Verified Facts
Gold prices reached fresh highs above $3,500 an ounce in early September 2025, reflecting a combination of persistent central-bank demand, investor appetite for havens, and growing odds that the Federal Reserve will move to ease policy.
Market signals, including futures and options activity, indicate increasing probability that the Fed will cut rates sooner than previously expected. Those expectations have been amplified after public criticisms of the Fed from President Donald Trump on September 3, 2025.
Analysts describe the current advance as an extension of a roughly three-year bull market in bullion, supported both by large-scale central-bank purchases and by macroeconomic worries about global growth and inflation dynamics.
Context & Impact
Political pressure on independent central banks can change investor behavior by raising doubts about the timing and credibility of monetary policy. If markets come to expect rate cuts, real yields fall and the opportunity cost of holding non-yielding assets like gold declines.
Potential impacts include:
- Lower bond yields if traders anticipate easier policy.
- Heightened volatility in equities as investors reassess growth and earnings outlooks.
- Increased inflation expectations, which can further support commodity prices.
For policymakers, sustained political attacks risk undermining public trust in the Fed and complicating communications ahead of policy meetings. For investors, the episode reinforces the appeal of gold as a hedge against policy uncertainty.
Official Statements
President Trump has publicly criticized the Fed’s policy choices in recent remarks, a factor cited by market participants when explaining recent shifts in rates pricing.
Reported public remarks, September 3, 2025
Explainer
Unconfirmed
- Exact timing of any Fed rate cuts remains uncertain and depends on upcoming data releases and Fed deliberations.
- The causal weight of political remarks versus other macro factors in driving the rally cannot be precisely quantified.
Bottom Line
Market moves show that political interference with monetary policy can have immediate effects on asset prices, with gold emerging as a primary beneficiary of perceived easing risks and higher inflation expectations. Investors should watch Fed communications and economic data closely for signs of a policy shift that could sustain or reverse the rally.