For over 110 years, the Federal Reserve (the Fed) has operated at a deliberate distance from the White House and Congress.

It is the only federal agency that doesn’t report to any single branch of government in the way most agencies do, and can implement policy without waiting for political approval.

These policies include interest rate decisions, adjusting the money supply, emergency lending to banks, capital reserve requirements for banks, and determining which financial institutions require heightened oversight.

The Fed can act independently on all these critical economic decisions and more.

But why does the US government enable this? And why is it that nearly every major economy has adopted a similar model for their central bank?

‍

The foundation of Fed independence: the panic of 1907

The Fed was established in 1913 following the Panic of 1907, a major financial crisis. It saw major banks collapse, the stock market drop nearly 50%, and credit markets freeze across the country.

At the time, the US had no central authority to inject liquidity into the banking system during emergencies or to prevent cascading bank failures from toppling the entire economy. 

J.P. Morgan personally orchestrated a bailout using his own fortune, highlighting just how fragile the US financial system had become.

The debate that followed revealed that while the US clearly needed a central bank, politicians were objectively seen as poorly positioned to run it.

Previous attempts at central banking had failed partly due to political interference. Presidents and Congress had used monetary policy to serve short-term political goals rather than long-term economic stability.

So it was decided that a stand-alone body responsible for making all major economic decisions would be created. Essentially, the Fed was created because politicians, who face elections and public pressure, couldn’t be relied upon to make unpopular decisions when needed for the long-term economy.

‍

How does Fed independence work?

Although the Fed is designed to be an autonomous body, separate from political influence, it still has accountability to the US government (and thereby US voters). 

The President is responsible for appointing the Fed Chair and the seven Governors of the Federal Reserve Board, subject to confirmation by the Senate. 

Each Governor serves a 14-year term, and the Chair serves a four-year term. The Governors' terms are staggered to prevent any single administration from being able to change the entire board overnight.

Beyond this “main” board, there are twelve regional Federal Reserve Banks that operate across the country. Their presidents are appointed by private-sector boards and approved by the Fed's seven Governors. Five of these presidents vote on interest rates at any given time, alongside the seven Governors.

This creates a decentralised structure where no single person or political party can dictate monetary policy. Changing the Fed's direction requires consensus across multiple appointees from different administrations.

‍

The case for Fed independence: Nixon, Burns, and the inflation hangover

The strongest argument for keeping the Fed independent comes from Nixon’s time as president in the 1970s.

Nixon pressured Fed Chair Arthur Burns to keep interest rates low in the lead-up to the 1972 election. Burns complied, and Nixon won in a landslide. Over the next decade, unemployment and inflation both rose simultaneously (commonly referred to now as “stagflation”). 

By the late 1970s, inflation exceeded 13 per cent, Nixon was out of office, and it was time to appoint a new Fed chair.

That new Fed chair was Paul Volcker. And despite public and political pressure to bring down interest rates and reduce unemployment, he pushed the rate up to more than 19 per cent to try to break inflation. 

The decision triggered a brutal recession, with unemployment hitting nearly 11 per cent. 

But by the mid-1980s, inflation had dropped back into the low single digits. 

Volcker stood firm where non-independent politicians would have backflipped in the face of plummeting poll numbers.

The “Volcker era” is now taught as a masterclass in why central banks need independence. The painful medicine worked because the Fed could withstand political backlash that would have broken a less autonomous institution.

‍

Are other central banks independent? 

Nearly every major developed economy has an independent central bank. The European Central Bank, Bank of Japan, Bank of England, Bank of Canada, and Reserve Bank of Australia all operate with similar autonomy from their governments as the Fed.

However, there are examples of developed nations that have moved away from independent central banks.

In Turkey, the president forced its central bank to maintain low rates even as inflation soared past 85 per cent. The decision served short-term political goals while devastating the purchasing power of everyday people.

Argentina's recurring economic crises have been exacerbated by monetary policy subordinated to political needs. Venezuela's hyperinflation accelerated after the government asserted greater control over its central bank.

The pattern tends to show that the more control the government has over monetary policy, the more the economy leans toward instability and higher inflation.

Independent central banks may not be perfect, but they have historically outperformed the alternative.

‍

Why do markets care about Fed independence?

Markets generally prefer predictability, and independent central banks make more predictable decisions.

Fed officials often outline how they plan to adjust policy and what their preferred data points are. 

Currently, the Consumer Price Index (CPI), Personal Consumption Expenditures (PCE) index, Bureau of Labor Statistics (BLS) monthly jobs reports, and quarterly GDP releases form expectations about the future path of interest rates.

This transparency and predictability help businesses map out investments, banks to set lending rates, and everyday people to plan major financial decisions.

When political influence infiltrates these decisions, it introduces uncertainty. Instead of following predictable patterns based on publicly released data, interest rates can shift based on electoral considerations or political preference, which makes long-term planning more difficult.

The markets react to this uncertainty through stock price volatility, potential bond yield rises, and fluctuating currency values.

‍

The enduring logic

The independence of the Federal Reserve is about recognising that stable money and sustainable growth require institutions capable of making unpopular decisions when economic fundamentals demand them.

Elections will always create pressure for easier monetary conditions. Inflation will always tempt policymakers to delay painful adjustments. And the political calendar will never align perfectly with economic cycles. 

Fed independence exists to navigate these eternal tensions, not perfectly, but better than political control has managed throughout history.

That's why this principle, forged in financial panics and refined through successive crises, remains central to how modern economies function. And it's why debates about central bank independence, whenever they arise, touch something fundamental about how democracies can maintain long-term prosperity.

Gold's breakthrough above US$5,000 and silver's surge through US$100 signal this year could be one for the history books for metal traders (one way or another).

‍

Quick facts

• Elevated safe-haven demand lifts Gold targets from US$5,400 to US$6,000 after early-year US$5,000 breakout.
• Artificial intelligence (AI) and data-centre infrastructure ramp-up could help drive silver and copper demand.
• Continued geopolitical uncertainty and shifting monetary policy could trigger metal volatility throughout the year.

‍

Top 5 metals to watch in 2026

1. Gold

Gold's breakout over US$5,100 arrived three quarters ahead of some forecasts. With Bank of America quickly raising its end-of-year target to US$6,000 and Goldman Sachs projecting US$5,400, the safe-haven commodity remains the biggest asset in focus for 2026.

Key drivers:

• Central banks are currently buying an average of 60 tonnes of gold per month, compared to 17 tonnes pre-2022.
• Two Fed rate cuts are priced in for 2026, reducing the opportunity cost of holding non-yielding assets like gold.
• Trump tariff policies, Middle East tensions, and fiscal sustainability concerns are keeping safe-haven demand elevated.
• Gold's share of total financial assets hit 2.8% in Q3 2025, with room to grow as retail FOMO kicks in.

What to watch

• Jerome Powell is set to be replaced as Fed chair in May 2026. Actual policy direction post-replacement may differ from current market expectations for cuts.
• If geopolitical hedges into safe havens remain or if there is an unwinding like post- 2024 US election.
• The potential weaponisation of dollar asset holdings by European nations as a response to US tariffs.

‍

2. Silver

Silver is the metal that has benefited the most from the 2025 AI boom, with its surge to US$112 all-time-highs to kick off 2026 (70% above fundamental value as per Bank of America signal), demonstrating its volatile potential.

Key drivers

• Industrial demand from AI infrastructure, solar, and electric vehicles (EVs), semiconductors and data centres currently has no viable substitute for silver's conductivity.
• Six consecutive years of supply deficit, with above-ground stocks depleting and recycling bottlenecks limiting secondary supply.
• Policy optics may matter. The US decision to add silver to its list of “critical minerals” has been cited as a potential factor in volatility, including around trade policy risk.
• Retail participation can amplify price moves, particularly when the demand for gold becomes “too expensive”.

What to watch

• If solar panel demand continues its trajectory, or if 2025 was the peak.
• Whether the recycling supply responds to record prices by increasing silver refining and material processing capacity.
• How exchange inventory and lease rates move as potential signals of physical tightness.

‍

3. Copper

Copper's 2026 story hinges on continued data centre demand, renewable energy infrastructure growth, and China's struggling property market.

Key drivers

• Data centre copper consumption is projected to hit 475,000 tonnes in 2026, up 110,000 tonnes from 2025.
• Worker strikes in Chile and Grasberg restart delays are keeping the Copper market structurally tight.
• The US tariff decision on refined copper imports is expected in mid-2026 (15%+ currently anticipated), creating potential stockpiling and trade flow distortions.
• Goldman Sachs has forecast that power grid infrastructure and EV buildout could add "another United States" worth of copper demand by 2030.
• Current Chinese property weakness is creating demand uncertainty, potentially offsetting infrastructure spending.

What to watch

• Whether Grasberg ramps production smoothly or faces further setbacks.
• Chinese property market stimulus effectiveness.
• Actual tariff implementation timing and magnitude.
• Yangshan premium movements signalling real physical demand versus financial positioning.

‍

4. Aluminium

Trading near three-year highs of US$3,200, aluminium faces continued tightness into 2026 as China's capacity ceiling forces global markets to adjust.

Key drivers

• China's 45 million tonne capacity cap was reached in 2025. For the first time in decades, Chinese output cannot expand, potentially ending 80% of global supply growth.
• As copper prices increase, Reuters has reported that some manufacturers have been substituting aluminium for copper in certain applications as relative prices shift.

What to watch

• South32 has said Mozal Aluminium is expected to be placed on care and maintenance around 15 March 2026, thus removing Mozambique's 560,000 tonne significant supply.
• If Indonesian and Chinese offshore capacity additions can compensate for Chinese domestic ceiling.
• Century Aluminium's 50,000 tonne Mount Holly restart in Q2 could provide a signal for the broader industry as the smelter is expected to reach full production by 30 June 2026.

5. Platinum

Platinum's breakout above US$2,800 follows three consecutive years of supply deficit and increased adoption of hydrogen fuel cells (for which it is a vital component).

Key drivers

• The World Platinum Investment Council (WPIC) has forecast a significant supply deficit of 850,000 ounces in 2026 which could drain inventories, with limited new production coming online.
• WPIC forecasts 875,000 to 900,000 oz uptake by 2030 for heavy-duty trucks, buses, and green hydrogen electrolysers.
• Palladium-to-platinum substitution in catalytic converters is increasing in EV production.

What to watch

• Supply response from producers. Platreef and Bakubung are adding 150,000 oz, but production discipline could limit a broader ramp-up.
• US tariffs on Russian palladium could create spillover demand for platinum in EV production.
• The pace of hydrogen infrastructure investment and heavy-duty vehicle adoption rates in Europe, China, and US.
• Chinese jewellery demand could come into play. Just a 1% substitution from gold could widen the platinum deficit by 10% of the global supply.

‍You can trade Gold, Silver, and other Commodity CFDs, including energies and agricultural products, on GO Markets.

Start trading Commodity CFDs

The Australian Securities Exchange (ASX) is one of the world's top 20 exchanges, hosting over 2,000 listed companies worth approximately $2 trillion.

‍

Quick Facts:

• The ASX operates as Australia's primary stock exchange, combining market trading, clearinghouse operations, and trade and payment settlement.
• It represents roughly 80% of the Australian equity market value through its flagship ASX 200 index.
• 2,000+ companies and 300+ ETFs are listed on the exchange, spanning from mining giants to tech innovators.

‍

How does the ASX work?

The ASX combines three critical functions in one system.

As a market operator, it provides the electronic platform where buyers and sellers meet. Trading occurs through a sophisticated computer system that matches orders in milliseconds, replacing the traditional floor-based trading that once defined stock exchanges globally.

The exchange also acts as a clearinghouse, ensuring trades settle correctly. When you buy shares, the ASX guarantees the transaction completes, managing the transfer of securities and funds between parties.

Finally, it serves as a payments facilitator, processing the money flows that accompany each trade. This integrated approach reduces settlement risk and keeps the market running smoothly.

‍

What are ASX trading hours?

The ASX operates from 10:00am to 4:00pm Sydney time (AEST/AEDT) on business days, with a pre-open phase from 7:00am. 

Stocks open alphabetically in staggered intervals starting at 10:00am, followed by continuous trading until the closing auction at 4:00pm. 

The exchange observes Australian public holidays and adjusts for daylight saving time between October and April, which can affect coordination with international markets.

‍

Top ASX Indices

S&P/ASX 200

This is the exchange's flagship index. It tracks the 200 largest companies by market capitalisation and represents approximately 80% of Australia's equity market.

It serves as the primary benchmark for most investors and fund managers and is rebalanced quarterly to ensure it reflects the current market leaders.

All Ordinaries Index

Commonly called the All Ords, this index covers the top 500 companies on the ASX. 

It provides broader market exposure than the S&P/ASX 200, capturing roughly 80-90% of total market value. 

‍

The 11 ASX sectors

The ASX also breaks down into 11 sector-specific indices, allowing investors to track performance in areas like financials, materials, healthcare, and technology. 

These indices can help identify which parts of the Australian economy are strengthening or weakening.

‍

1. Financials dominates as the largest sector, driven by Commonwealth Bank, NAB, Westpac, and ANZ. These banking giants provide lending, wealth management, and insurance services across Australia.
2. Materials ranks second, led by mining powerhouses BHP and Rio Tinto. This sector extracts and processes resources, including iron ore, coal, copper, and gold.
3. Consumer Discretionary includes retailers, media companies, and hospitality groups that benefit when household spending rises.
4. Industrials encompasses construction firms, airlines, and professional services businesses.
5. Healthcare features companies like CSL, a global biotech leader, and Cochlear, which produces hearing implants.
6. Real Estate features property developers and Real Estate Investment Trusts (REITs) that own and manage commercial and residential assets.
7. Communication Services includes telecommunications providers like Telstra alongside media and entertainment companies.
8. Energy tracks oil and gas producers (many renewable energy companies typically fall under utilities).
9. Consumer Staples covers essential goods providers like supermarkets and food producers.
10. Information Technology includes software developers and IT services firms.
11. Utilities covers electricity, gas, and water suppliers, including renewable energy.

‍

Top ASX companies

Three companies consistently lead the S&P/ASX 200 by market capitalisation.

Commonwealth Bank (Mkt cap: A$259 bln)

Commonwealth Bank holds the top position on the ASX as Australia's biggest lender. 

Founded in 1911 and fully privatised by 1996, CBA offers retail banking, business lending, wealth management, and insurance.

Its performance often signals the health of the domestic economy.

BHP Group (Mkt cap: A$241 bln)

BHP Group stands as the world's largest mining company. 

Its diversified portfolio spans iron ore, copper, coal, and nickel operations globally. 

It serves as a bellwether for Australian commodity markets.

CSL Limited (Mkt cap: A$182 bln)

CSL Limited leads the Australian healthcare sector as a global biotech firm. 

Established in 1916, CSL develops treatments for rare diseases and manufactures influenza vaccines. 

The company demonstrates Australian innovation competing on the world stage.

‍

The ASX's role in Australia's economy

The ASX serves as a vital mechanism for capital formation in Australia. It tends to provide price signals that reflect market expectations. 

When share prices rise, it suggests optimism about economic conditions. Falling markets may indicate concerns about future growth.

Australian companies raise funds through initial public offerings and follow-on share sales on the ASX, using proceeds to expand operations, fund research, or pay down debt.

Investors in these shares benefit from potential capital gains and dividend income. Many Australians build retirement savings through superannuation funds that invest heavily in ASX-listed companies.

Employment in financial services also depends partly on a healthy stock market. Brokers, analysts, fund managers, and supporting roles exist because of active capital markets.

‍

Key takeaways

The ASX functions as a market operator, clearinghouse, and payments facilitator, providing the infrastructure that enables capital formation and supports retirement savings for millions of Australians.

Its flagship index, the S&P/ASX 200, tracks the 200 largest companies and captures about 80% of market capitalisation, while the All Ordinaries index covers the top 500. 

Financials and Materials dominate the exchange, led by Commonwealth Bank, BHP, and CSL, reflecting Australia's strength in banking and resources.

You can trade the S&P/ASX 200 Index CFD and over 230 ASX Share CFDs on GO Markets.