Markets plummeted Monday when President Trump blows up Federal Reserve Chairman Jerome Powell as he failed to cut interest rates amid a waning economic sentiment spurred by Trump’s tariff policies.
Trump escalated the war of words against Powell True Social Post Monday morning.
Trump called Powell a “major loser” after citing Nickman who said he was “too late” and told him to immediately lower interest rates.
“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.
The Dow Jones Industrial Average for large U.S. stocks fell more than 940 points, or more than 2.4%, as of 11:30am on Monday. The S&P 500 has dropped by more than 2.5%, while the technology-rich NASDAQ composite has dropped by almost 2.9%.
Stock markets have fallen off the cliff in recent weeks as Trump has stepped up his trade war.
The Dow lost more than 9% in the past month despite the rebounds when Trump announced a 90-day suspension at most tariffs, while the S&P 500 lost more than 9.2% and the NASDAQ lost more than 11%.
The president is increasingly angry with the Fed Chairman as Powell maintains the Fed’s moratorium on interest rate cuts amid in inflationary pressures caused by Trump’s tariff policies.
Kevin Hassett, director of the White House National Economic Council, told reporters last week that the administration is considering ways to remove Powell from his position, but the Fed is an independent institution and is set to be isolated from political pressure.
“The president and his team will continue to study the matter,” Hassett said Friday.
Legal experts said Trump could be able to put pressure on Powell from his chair, but he likely doesn’t have the legal authority to eliminate Powell as one of the Fed governors.
“Powell’s ending can’t come quickly enough!” Trump wrote in a social media post Friday.
On Monday, Trump said that a “first cut” interest rates is “a demanded by many.”
Powell doesn’t keep his view that Trump’s tariffs increase the risk of “stagflation.” There, rising prices clash with stagnant economic growth, punishing consumers.
“The levels of tariff increases announced so far are significantly greater than expected,” Powell said in a speech last week. “The same could be true of economic impacts, including higher inflation and slower growth.”
Like certainty, markets that tend to react negatively to large-scale policy disagreements, particularly public markets between Powell and Trump. Investors told Hill that if Trump tries to replace Powell before he will be in office next year, the market will respond well.
