Trump Blasts Powell Again as Dow Sinks 1,177 Points/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ President Donald Trump reignited his criticism of Federal Reserve Chair Jerome Powell, demanding interest rate cuts despite persistent inflation. His comments rattled markets already on edge, sending U.S. stocks and the dollar sharply lower. Investors now fear political interference in central bank independence could further damage economic stability. The S&P 500 was 2.8% lower in another wipeout, and the index at the center of many 401(k) accounts is more than 16% below its record set two months ago. The Dow Jones Industrial Average was down 1,177 points, or 2.7%. Tesla and other Big Tech stocks had some of the sharpest losses, which dragged the Nasdaq composite down a market-leading 3.2%.
Trump-Powell Clash Sends Markets Tumbling – Quick Looks
- Renewed Criticism: Trump calls Powell “a major loser,” pushes rate cuts.
- Inflation Claims: Trump says prices are falling; data says otherwise.
- Dow sinks 1,177 points as worries about Trump’s trade war and his criticism of the Federral Reserve spook investors.
- Market Impact: S&P 500 drops 2.8%, dollar weakens sharply.
- Fed Independence Threatened: White House considers legal options to fire Powell.
- Investor Anxiety: Interest rates rise, dollar and Treasuries under pressure.
- Economic Uncertainty: Global markets respond to growing U.S. instability.
Deep Look: Trump’s Renewed Attacks on Fed Chair Powell Rattle Markets
WASHINGTON — Financial markets took a fresh hit Monday as President Donald Trump again lashed out at Federal Reserve Chair Jerome Powell, deepening investor concerns about central bank independence and the direction of U.S. economic policy. Dow sinks 1,177 points as worries about Trump’s trade war and his criticism of the Federral Reserve spook investors. The S&P 500 was 2.8% lower in another wipeout, and the index at the center of many 401(k) accounts is more than 16% below its record set two months ago. Tesla and other Big Tech stocks had some of the sharpest losses, which dragged the Nasdaq composite down a market-leading 3.2%.
In a post early Monday, Trump labeled Powell a “major loser” and repeated his demand for immediate interest rate cuts to “boost the economy.” The president insisted that energy and grocery prices are “substantially lower” and that there is “virtually No Inflation.” However, recent economic data contradicts that claim: food prices rose in both January and March, and core inflation continues to sit above the Fed’s 2% target.
Market Reaction: Stocks, Dollar Slide
The U.S. dollar lost ground against major global currencies, a signal that investors are pulling back from U.S. assets. Typically, when stock markets drop and Treasury yields rise, investors flood into safer U.S. government bonds, strengthening the dollar. But this time, the opposite occurred — suggesting a broader retreat from U.S. markets amid policy concerns.
Fed Under Fire: White House Eyes Powell’s Removal
On Friday, a senior White House official said the administration is “reviewing options” to potentially remove Powell — a move that would almost certainly trigger a legal showdown and spook global markets. Trump has publicly flirted with the idea of firing Powell, though experts say such action would undermine central bank credibility.
Powell has made it clear he will not step down and is committed to serving through his term, which ends in May 2026. He has also emphasized the Fed’s mission to maintain price stability and remain insulated from political pressure — a foundational principle for global confidence in the U.S. economy.
Inflation Reality vs. Trump’s Claims
While gas prices have declined due to lower global oil demand, overall inflation remains sticky. Analysts say the Federal Reserve’s cautious approach to rate cuts is aimed at avoiding a rebound in inflation, especially as geopolitical tensions and supply chain volatility continue.
Trump’s economic argument hinges on lowering rates to stimulate growth, especially as his trade war policies and tariffs create uncertainty. However, critics argue that rushing to cut rates could undermine long-term financial stability.
Interest Rates and Borrowing Costs
Trump’s statements have also affected bond markets. The yield on the 10-year Treasury note — a key benchmark for mortgage and loan rates — rose to 4.35%. Higher yields generally mean higher borrowing costs for consumers, potentially weakening the housing market and other rate-sensitive sectors.
The president’s attacks have created a feedback loop: rising rates signal market concern, which weakens investor confidence, which in turn hurts the dollar and stock prices.
Legal and Political Risks Mount
Removing Powell would require an unprecedented legal effort. The Federal Reserve Act does not clearly authorize the president to fire a Fed chair without cause. Legal scholars widely agree such an attempt would erode confidence in U.S. institutions, likely triggering court challenges and investor backlash.
Nevertheless, Trump appears determined to cast Powell as an obstacle to growth, continuing a strategy he first employed during his earlier presidency when he publicly pressured the Fed on rate decisions.
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