US stock markets fell again Monday morning as Jerome Powell’s Donald Trump, whom the US president called the “major loser” to keep on attacking.
“Unless the losers are too late, the main losers and the interest rates are not lowered, there’s an economic slowdown,” Trump wrote on social media.
Recently, Trump has increased his attacks on the Fed Chairman, cutting interest rates on Powell, offsetting the inflation impact of the new tariffs.
Trump has pressured the Fed to cut interest rates, likely to soothe the stock market, and fell sharply after announcing the latest tariffs. However, Wall Street has not taken any bait and appears to be responding against Trump’s attack on Powell and the independence of the US Central Bank.
The Dow reduced the day by 2.5%, the high-tech Nasdaq composite fell above 2.5%, and the S&P 500 fell 2.4%. Previous high-tech stock favourites, including Tesla and Navidia, lost ground, but the dollar’s value fell to multi-year lows for most major currencies.
The stock market recovered the losses they endured after Trump deployed his “liberation day” tariff proposal. But after Trump announced a 90-day suspension of so-called mutual tariffs, almost all profits earned in the stock market were wiped out in these new jabs against Powell.
Powell is known to be extremely measured in his official duties, talking about Trump’s tariffs in recent weeks, warning that it could lead to a “challenging scenario” for the Fed, implying that the Fed has no plans to cut interest rates any time soon.
“Taxes are very likely to generate at least a temporary increase in inflation. The inflation effect could be more sustainable,” Powell told reporters on April 16.
US inflation peaked at 9% in June 2022, but has slowly fallen over the past few years, mainly due to careful adjustments to Fed interest rates. The Fed has set its inflation target at 2%.
Powell often refers to the “double mission” of the central bank. This means maximizing employment and continuing to curb inflation. Higher interest rates can lower prices, but can put you at risk for high unemployment. Over the past few years, the Fed has been able to reduce inflation while maintaining its unemployment rate relatively low, while maintaining its approximately 4%. Inflation cooled to 2.4% last month, but the latest government figures do not account for Trump’s tariffs.
The Fed has long been treated as a nonpartisan, nonpolitical federal agency, but Trump recently came to the idea of ending Powell, whose term rose in May 2026. Trump wrote on social media last week.
Such a move is unprecedented and will likely put Wall Street in a further tail spin. In an interview with CNBC, Krishnaguha, vice-chairman of stock research firm Evercore ISI, said there was a “serious reaction” from the market when Trump fired Powell.
“I can’t believe that’s what the administration is trying to achieve,” Guha said.
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It is also unclear whether Trump has the authority to remove Powell from his post. The Supreme Court is currently hearing a lawsuit that could help Trump increase his ability to fire federal employees before his term rises, but it is unclear whether it will reach the Fed.
Last week, Powell emphasized the importance of the Fed’s independence from political forces.
“Our independence is a matter of law,” Powell said. “We serve very long, seemingly endless conditions, so we are protected by the law.”
But that doesn’t mean the Trump administration hasn’t tried. On Friday, White House economic adviser Kevin Hassett told reporters that if Powell can legally fire it, the administration will “continue studying.”
Federal Reserve officials meet monthly to discuss potential changes in interest rates. The next meeting between staff will be held from May 6th to 7th.
