New York, United States – US stock markets plummeted on Monday morning as President Donald Trump continued his verbal assault on Federal Reserve Chair Jerome Powell. Trump criticized Powell for not lowering interest rates, calling him a “major loser” and warning of potential economic slowdown unless rates are cut immediately.
Trump’s attacks on Powell have intensified in recent days, with the president urging the Fed to lower interest rates to counterbalance the inflationary effects of new tariffs. The stock market reacted negatively to Trump’s announcement of additional tariffs, leading to a significant drop in major indices like the Dow Jones Industrial Average, the Nasdaq Composite, and the S&P 500.
The Dow fell by 1,000 points, or 2.8%, while the Nasdaq and S&P were down over 3% and 2.9%, respectively. Tech stocks like Tesla and Nvidia also experienced notable declines, and the dollar saw a drop in value against other major currencies. These market fluctuations followed Trump’s recent tariff proposals and subsequent criticism of Powell.
Powell, known for his cautious approach to public statements, has expressed concerns about the impact of tariffs on inflation and the economy. He emphasized the Fed’s dual mandate of maintaining price stability and maximum employment, acknowledging the potential challenges posed by Trump’s trade policies.
Despite pressure from the administration to cut interest rates, Powell has indicated that the Fed has no immediate plans to do so. The Fed has historically operated as an independent, nonpartisan institution, with Powell highlighting the importance of preserving this autonomy in the face of political pressures.
The ongoing tensions between Trump and Powell have raised questions about the Fed’s future actions and the potential consequences for financial markets. Speculation about the president’s authority to remove Powell from his position has added to the uncertainty surrounding the Fed’s policy decisions.
As Fed officials prepare for their next meeting in May to discuss interest rates, the market remains on edge about the potential implications of Trump’s criticisms and the broader economic landscape. The Fed’s commitment to independence and stability will continue to be tested amidst the ongoing confrontation with the White House.