Trump Intensifies Attacks on Fed Chair Powell, Fueling Market Turmoil and Dollar Plunge

President Donald Trump escalated his criticism of Federal Reserve Chair Jerome Powell Monday, publicly urging the central bank to lower interest rates ‘pre-emptively’ to stimulate the economy. In a series of social media posts, Trump dubbed Powell a ‘major loser,’ arguing that he has been too slow to respond to economic developments and that inaction could lead to an economic slowdown. This latest salvo comes amidst a period of significant market volatility, with major US indices experiencing substantial declines.

The S&P 500 index fell approximately 2.4% on Monday, marking the worst single-day drop for the year so far. The Dow Jones Industrial Average experienced a 2.5% decline, dropping roughly 10% since January’s start, while the Nasdaq Composite saw a more dramatic fall of over 2.5%, resulting in an approximately 18% decrease since the beginning of the year.

The dollar index also suffered a significant drop, reaching its lowest level since 2022, signaling a weakening in the US currency against a basket of major global currencies including the Euro. Furthermore, interest rates on US government debt increased as investors sought higher returns on Treasury securities – reflecting heightened risk aversion within the market.

Trump’s criticism isn’t new; he has repeatedly voiced his dissatisfaction with Powell’s policies since Powell took the helm of the Fed during Trump’s first term. Past criticisms have included calls for Powell’s dismissal, as evidenced by a recent social media post where Trump demanded Powell be removed from his position. While such a move would be legally and politically contentious due to the Fed’s established tradition of independence, senior White House economic advisors reportedly confirmed that officials are actively exploring the feasibility of challenging Powell’s authority.

The market turbulence is further exacerbated by ongoing trade tensions and Trump’s imposition of tariffs on imported goods. Powell has previously warned about the potential negative impact of these tariffs on consumer prices and overall economic growth. The combination of these factors – aggressive criticism from the White House, rising interest rates, and trade uncertainty – paints a concerning picture for the US economy and financial markets.