On Monday, US stock markets suffered a sharp drop after another attack by President Donald Trump on Federal Reserve Chairman Jerome Powell. The reason for the criticism was the Fed’s refusal to cut interest rates amid the administration’s tariff policy.
According to The Hill, Trump called Powell a “big loser” and “Mr Too Late” on his social network Truth Social, accusing him of threatening to slow the economy:
“There could be a slowdown if Mr Too Late, the big loser, doesn’t cut interest rates now,” Trump wrote.
Following these announcements, as of 11:30 a.m. local time (18:30 a.m. Kyiv time), stock indices plummeted:
- TheDow Jones fell by more than 940 points (over 2.4%)
- The S&P 500 lost more than 2.5%
- Nasdaq – almost 2.9%.
This is the latest episode in the ongoing tension between the White House and the independent Federal Reserve. Trump continues to pressure the Fed to stimulate the economy by cutting rates, despite the fact that inflationary pressures remain due to the administration’s own tariff policy.
It should be noted that over the past month, despite the announcement of a 90-day pause for most tariffs, the market has lost significant ground:
- Dow – minus 9 per cent
- S&P 500 – minus 9.2%.
- Nasdaq – minus 11%.
Meanwhile, Powell refrains from cutting rates, considering it economically unjustified amid global uncertainty and domestic pressure.
The independence of the Fed is a key principle of the US economy, but Trump is already openly considering ways to fire Powell, which could lead to an unprecedented politicisation of monetary policy in the US.
