Trump was not charged and Cohen's plea deal does not mean the president has been implicated in anything, press secretary Sarah Sanders said at a White House briefing. With the prior reading flat, dairy prices are now 10% lower since May.
Trump's reiteration on Monday of displeasure with rising interest rates has weighed on the dollar, ahead of the release of the Fed's minutes later on Wednesday and its annual economic symposium at Jackson Hole, Wyoming on Friday.
Japanese shares ended little changed with a positive bias and the yen was flat as investors waited for the outcome of trade talks between the US and China. It was of course the Greenback that drove the momentum shift, as it found itself losing ground across the board on the back of comments from President Trump. Determining the "ideal" or most "effective" rate of inflation is therefore a fine art, and one of the most complex and crucial functions of the Fed. He said the Fed was designed so that it would be accountable to policy makers and the public, but it was also created to be somewhat independent from jawboning from the White House.
And: Is Chairman Jerome Powell troubled by President Donald Trump's public denunciation of the Fed's interest rate hikes?
Benchmark US government debt yields slid to six-week lows on a flight to safety bid and the dollar weakened further as investors assess how a conviction and a guilty plea of two former advisers could impact Trump.
Home improvement chain Lowe's (LOW.N) surged 7.9 percent, reversing losses from before the bell, as investors took positively new Chief Executive Marvin Ellison's moves to reduce slow-moving product lines and shed unsuccessful businesses.
The independence of the Federal Reserve is vital to the functioning of a healthy economy.
John Ashbourne, senior emerging markets economist at Capital Economics said: "policymakers will be hesitant to hike rates too soon".
Although Trump's comments helped gold rise, Julius Baer analyst Carsten Menke said the comments would not fundamentally change the outlook for bullion or monetary policy in the United States. Volcker is credited with demanding of first President Carter and then President Reagan an autonomous and independent central bank. The Fed has been carefully and gradually raising rates over the past several years to keep inflation in check and prevent the economy from overheating.
The U.S. -China trade talks are set to begin later on Wednesday in Washington, although expectations are generally low.
Elsewhere, platinum rose 0.5 percent to $797.50 an ounce, having touched its highest in a week.
South Africa's Harmony Gold reported a 43 per cent fall in annual earnings on Tuesday, hurt by impairments and a loss relating to debt denominated in U.S. dollars, and a setback to its safety record. Trump's remarks break a fifty-year taboo against direct remarks from a sitting President on the Fed and the Fed Chairman.
Powell last month said in an interview that the Fed has a "long tradition" of independence from political concerns, and that no one in the Trump administration had said anything to him that gave him concerns on that front.