The Dow plunged more than 950 points on Monday as President Trump stepped up his attack on the independence of the Federal Reserve.
Dow Jones Industrial Average slid 971.82 points (2.5%) to 38,170.41 after losing 1,406 points in the short week of the previous holiday. The US market closed on Friday.
I also skated over 2% of the S&P 500 and Nasdaq.
“Obviously, the market doesn’t like the certainty of uncertainty, and is reflected in the daily volatility and market decline,” Ted Jenkin, president of Exit Stage Left Advisors, told the Post.
“We will continue to see choppy financial days in the market until this volatility settles.”
In Monday’s fiery truthful social rant, Trump once again called for the Federal Reserve to quickly cut interest rates, provoking Powell by the nickname “Mr. Too Late.”
“Many people are looking to “preemptively reduce interest rates.” There is virtually no inflation in the wake of lower energy costs, food prices (including Biden’s egg disaster!) being significantly lower, and most other “things” are falling,” Trump wrote.
According to the latest data, consumer prices rose 2.4% over the past 12 months until March.
Last month, supermarket egg prices hit record highs despite fewer cases of avian flu and lower wholesale costs.
“These costs are so low that there’s little inflation just what they’ve predicted they’ll do, but it’s too late, it’s a major loser and there’s a slowdown in the economy unless we lower interest rates,” Trump continued.
“Powell was always ‘late’, except for the election period he lowered to help sleepy Joe Biden, who would later be elected by Kamala. ”
If the Fed cuts interest rates now, it could seem like it’s falling into a cave in Trump’s political agenda, according to Kenneth Mahoney, CEO of Mahoney Asset Management.
It “puts them between the rocks and the difficult places,” Mahoney told the Post. “Even if you think the cut is the right move at some point, it seems like they’re softening Trump and bent at his will.”
Director of National Economic Council, Kevin Hassett, on Friday, said he was researching whether Trump could fire Fed Chairman Jerome Powell.
Last week, Trump wrote in the Truth Social Post, “Powell’s end cannot come quickly enough.”
That excavation will keep inflation longer, following warnings from the country’s top central bankers that could wipe out tariffs, and he will not rush to cut fees.
On Wednesday, Powell warned that Trump’s new wave of trade taxes is “significantly larger than expected,” adding that “the same is likely to apply to economic impacts, including higher inflation and slower growth.”
“While avoiding that outcome depends on the magnitude of the effect, how long it will take them to fully pass to the price, and ultimately, fully locking in the long-term inflation expectations,” he continued.
The market has suffered sharp losses and particularly volatile trading sessions over the past three weeks as Trump’s strict tariffs, including China’s 145% tax rate, are worried that taxes could reheat inflation and even cause a recession.
Last month, supermarket egg prices hit record highs despite fewer cases of avian flu and lower wholesale costs.
On Thursday, the Dow and Nasdaq recorded their third losing session in a row. The week ended with a fall of more than 2% in each of the four days. The S&P 500 rose on Thursday, but fell 1.5% over the week.
On April 2nd, his so-called “liberation day,” Trump announced a massive taxation levies, including large fees for many key trading partners. He then suspended these tax rates for 90 days and reduced them to an entire 10%.
Investors hope that the US can reach meaningful negotiations with foreign countries and soon – as global trade tensions could trigger supply chain crises and price hikes in some industries.
