When central bank independence gets shaky, the ripple effects spread fast across borders. Bank of England leadership is raising a serious alarm: any erosion of Federal Reserve autonomy poses real spillover risks to the UK economy.

Why does this matter? Independent central banks make unpopular decisions when necessary—hiking rates to fight inflation, tightening liquidity, resisting political pressure. Once that independence cracks, monetary policy becomes hostage to short-term political agendas. For the UK, which runs a trade-heavy economy and relies on dollar-denominated assets, a weakened Fed means unpredictable currency swings, capital flow disruptions, and imported inflation.

The concern isn't just theoretical. We've seen what happens when central banks lose credibility—market confidence collapses, volatility spikes, and emerging economies feel it worst. Britain, despite being developed, isn't immune to Fed policy shocks.

For investors watching crypto and broader markets, this matters. Policy uncertainty at major central banks tends to correlate with risk-on/risk-off cycles in digital assets. When traditional finance gets shaky, money flows get messy.