US stocks and dollar slump again as Trump attacks Fed chief
Things are getting rocky on Wall Street—and the drama isn’t just economic, it’s political too.
In a move that rattled investors worldwide, former President Donald Trump reignited his feud with Federal Reserve Chair Jerome Powell, calling him “a major loser” for not cutting interest rates fast enough. Trump’s latest social media outburst urged Powell to slash rates “pre-emptively,” warning that economic slowdown could loom large if action isn’t taken now.
So, what’s really happening—and why should you care? Let’s break it down.
What Happened to the US Stock Market?
Here’s the short version: Stocks took a nosedive. On Monday alone:
- S&P 500 dropped around 2.4%
- Dow Jones Industrial Average sank 2.5%
- Nasdaq tumbled more than 2.5%
These numbers are more than just headlines. The S&P 500 is now down 12% year-to-date, the Dow is off by 10%, and the tech-heavy Nasdaq is down 18% since January.
That’s a significant shakeup—especially considering the index trends investors watch most closely.
Why Did the Dollar Plunge Too?
You’d think the US dollar—often seen as a “safe haven”—would rise when markets fall, right? Not this time.
The dollar index, which tracks the greenback against currencies like the euro and yen, hit its lowest point since 2022. This rare dip suggests growing unease over how the Fed is handling interest rates, combined with rising inflation worries and global economic jitters.
Investors also demanded higher returns on US Treasury bonds, pushing up interest rates on government debt. This means the market is signaling risk—loud and clear.
What’s the Deal Between Trump and Powell?
Here’s where things get spicy.
Trump appointed Powell to lead the Federal Reserve during his first term but quickly grew frustrated with Powell’s resistance to slashing rates aggressively. Their relationship has been tense ever since.
Now, Trump is back in the headlines, blasting Powell again—claiming he’s been “too late” in addressing economic signals. He even floated the idea of firing him, a move economists say would violate the Fed’s long-standing independence.
Powell, for his part, has remained calm, previously telling reporters he doesn’t believe a president can legally remove the Fed chair. But that hasn’t stopped Trump’s allies from exploring legal loopholes.
Why Gold Is Suddenly Everyone’s Best Friend
While stocks and dollars wobbled, gold soared.
On Monday, spot gold prices smashed a new record, crossing $3,400 per ounce—a first in history. Why? Simple: Investors look to gold as a safe place to park money during uncertain times. When markets feel risky, gold becomes golden again.
Global Ripple Effects
The impact wasn’t limited to the U.S. Even Asia saw some tremors:
- Japan’s Nikkei 225 slipped 0.1%
- Hong Kong’s Hang Seng fell 0.5%
- Australia’s ASX 200 also dipped slightly
While these drops aren’t massive, they signal that global markets are watching the U.S. drama closely.
What Should You Take Away From All This?
Here’s the bottom line: Political tensions are bleeding into the financial markets.
Trump’s open criticism of Powell, paired with fears of a recession and global instability, is adding fuel to an already volatile situation. If you’re an investor, or even just watching your retirement savings, it’s a reminder that macroeconomic trends and political headlines are deeply connected.
And as always, when markets swing this hard, it pays to:
- Stay informed
- Diversify your investments
- Avoid emotional decisions
Final Thoughts
Whether or not Powell changes course, the spotlight on the Federal Reserve’s next move is intense. Trump’s latest remarks may be political, but they’re having real-world consequences—and fast.
In times like these, keeping calm, staying diversified, and understanding the bigger economic picture is more important than ever.
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