US Stocks and Dollar Plunge as Trump Intensifies Attacks on Fed Chair Powell

The U.S. financial markets experienced another day of sharp losses after President Donald Trump escalated his criticism of Federal Reserve Chair Jerome Powell, accusing the central bank leader of failing to act swiftly enough to shield the economy from mounting recessionary risks.

In a pointed social media post, Trump referred to Powell as a "major loser" and urged the Federal Reserve to "pre-emptively" cut interest rates, warning that further economic deterioration was imminent if action was not taken immediately.

“There can be a SLOWING of the economy unless Mr. Too Late, a major loser, lowers interest rates, NOW,” the president posted.

The remarks came amid continued market volatility fueled by the administration’s aggressive tariff strategies and fears of a broader economic slowdown.

Major Indexes in Retreat

Wall Street responded sharply to the renewed rhetoric. On Monday, the S&P 500 dropped approximately 2.4%, bringing its year-to-date losses to around 12%. The Dow Jones Industrial Average shed 2.5%, while the tech-heavy Nasdaq Composite also declined by more than 2.5%, now down nearly 18% since the beginning of the year.

Markets remained subdued on Tuesday, with minimal movement across global indexes. Japan’s Nikkei 225 and Australia’s ASX 200 edged lower by around 0.1%, while Hong Kong’s Hang Seng fell 0.5%.

Dollar Weakens, Gold Surges

Typically viewed as a safe-haven asset, the U.S. dollar failed to find support amid the turmoil. The dollar index, which tracks the greenback against a basket of major currencies, slipped to its lowest level since 2022.

At the same time, interest rates on U.S. government bonds rose, as investors demanded higher returns for holding long-term Treasuries — a sign of dwindling confidence in U.S. fiscal stability.

The uncertainty drove investors toward traditional havens. Gold prices soared, reaching an all-time high, with spot gold surpassing $3,400 per ounce — the first time the precious metal has crossed that threshold.

Political and Legal Tensions Rise

President Trump’s attacks on Powell are not new. During his first term, he reportedly explored options to remove the Fed chair, an act considered controversial given the Federal Reserve’s long-standing tradition of independence.

The latest escalation follows Powell’s warnings that new import tariffs imposed by the Trump administration could raise consumer prices and dampen economic growth. In recent days, Trump has publicly suggested Powell should be dismissed, stating:

“Powell’s termination cannot come fast enough.”

While Powell has maintained that the president does not have the legal authority to remove him, Trump’s top economic advisors have reportedly been exploring legal avenues to pursue such a move. The revelation was made public on Friday, when U.S. financial markets were closed for the day.

Outlook Remains Uncertain

Investors are now grappling with growing questions about Federal Reserve independence, the direction of U.S. monetary policy, and the long-term implications of the White House’s approach to trade and interest rates.

The combination of political interference, inflationary risks, and fragile global confidence has heightened market sensitivity.

“Market stability depends as much on policy consistency as it does on macroeconomic indicators,” said a senior economist at a New York-based financial firm. “When leadership wavers, volatility becomes the new normal.”

With inflation still a pressing concern and the trade war continuing to weigh on global supply chains, the Federal Reserve’s next policy steps will be closely watched — both by investors and by the administration that appointed its chair.