Trump’s Escalating Attacks on Powell are Making Investors Cautious of The U.S.
Yesterday’s edition of this newsletter cautioned that U.S. President Donald Trump’s desire to intervene in the Federal Reserve, as he expressed to reporters on Friday, could result in upheaval in the markets. That didn’t happen because markets were closed for the Good Friday holiday.
On Monday, trading resumed. So have Trump’s attacks on the central bank — and, more pointedly, on Fed Chair Powell, describing him as “Mr. Too Late” and “a major loser” for not cutting interest rates. Trump appointed Powell to the Federal Reserve’s highest seat in his first presidential term during 2017.
With no market closure to shield shares from Trump’s threats, investors unloaded their stocks. All major U.S. indexes fell, weighed down by steep declines in the “Magnificent Seven” group of shares. The U.S. dollar weakened to a three-year low while gold prices hit a new high, suggesting, in combination, that global investors are losing confidence in the U.S. economy and reallocating their capital to safer assets shielded from Trump.
Trump escalates attacks on Powell
U.S. President Donald Trump on Monday renewed and escalated his attacks on Federal Reserve Chair Jerome Powell. ″‘Preemptive Cuts’ in Interest Rates are being called for by many,” Trump said on Truth Social. “There can be a SLOWING of the economy unless Mr. Too Late, a major loser, lowers interest rates, NOW,” Trump wrote, referring to Powell. On Friday, Trump also called for Powell to cut rates.
Stocks and U.S. dollar fall as gold hits high
Stocks in the U.S. fell Monday on Trump’s comments. The S&P 500 lost 2.36%, the Dow Jones Industrial Average tumbled 2.48% and the Nasdaq Composite was down 2.55%. The ICE U.S. Dollar Index, which measures the greenback against a basket of foreign currencies, fell as low as 97.92 on Monday, the lowest level since March 2022, according to FactSet. Gold prices jumped to $3,452.30 per ounce, a fresh record.
Source : CNBC
