Markets fall as Trump renews attack against Fed chair

President Donald Trump renewed his attacks on Federal Reserve Chair Jerome H. Powell on Monday, exacerbating a stock sell-off and dragging the dollar to a three-year low amid persistent uncertainty about the administration’s approach to trade and the economy.

All three major stock indexes fell more than 2% , with Big Tech, including Apple and Tesla, driving some of the fall. The Dow Jones Industrial Average closed down nearly 1,000 points, while yields on Treasurys rose. The prices of gold and bitcoin jumped.

Shortly after markets opened, Trump referred to Powell as a “major loser” on Truth Social and said the U.S. economy could slow without an immediate reduction in the cost of money amid the fallout from his trade war.

“ ‘Preemptive Cuts’ in Interest Rates are being called for by many,” the president said. “Powell has always been ‘To (sic) Late.’ ”

Monday’s sell-off shows how investors remain uneasy about Trump’s escalating tariffs.

The president has imposed a range of tariffs, including 10% tax on most imported goods, plus levies on steel and aluminum as well as a 145% tariff on Chinese goods. Meanwhile, his administration is negotiating trade deals with dozens of countries to avoid even steeper tariffs, which are on hold.

The uncertainty has led to a sell-off, especially among tech stocks, as the tariffs could significantly hit their revenue, said Wedbush Securities analyst Dan Ives. The extent of the possible damage is not clear, with so many trade negotiations underway.

“This has created an unprecedented environment for tech companies to navigate, and Trump’s Powell comments just add fuel to the fire,” Ives said. The added uncertainty, Ives said, “has left investors in a dark tunnel with no flashlight.”

Some analysts said Trump’s comments could be seen as an attempt to pressure the central bank or to blame Powell if the economy slows down.

The Fed is structured to set interest rates free from political pressure from the White House or Congress. The idea is to insulate monetary policy from short-term political goals, because elected officials often prefer lower interest rates to spur immediate growth, even if it risks higher inflation down the line, which could ultimately harm the broader economy.

Four investment analysts told yhe Washington Post on Monday that the weakening dollar is a reflection of the U.S. being seen as less of a safe haven, with investors broadly selling U.S. assets and sending their money elsewhere.

“Maintaining the integrity of U.S. institutions is very important to the overall stability of the U.S. and global financial system, and talk about firing Powell is not helpful for that backdrop,” said Zachary Hill, head of portfolio management at Horizon Investments.

Trump referenced March inflation data, gathered before this month’s tariffs went into effect, to claim that there is “virtually No Inflation.” A key gauge of inflation – the consumer price index – showed prices rose by 2.4% in March from a year earlier, which showed progress but was still higher than the Fed’s 2% target.

“With these costs trending so nicely downward, just what I predicted they would do, there can almost be no inflation, but there can be a SLOWING of the economy unless Mr. Too Late, a major loser, lowers interest rates, NOW,” Trump wrote.

Monday’s comments are the latest in a series of attacks Trump has leveled against the Fed in recent months as he continues to push to exert more power over Washington’s independent agencies. On Thursday, Trump blasted the Fed for not lowering rates and said its chair’s “termination cannot come fast enough.”

That attack came a day after Powell warned that the administration’s trade war was “highly likely” to spur a temporary rise in inflation, with the potential for longer-lasting effects. Markets soured on Powell’s remarks.

Trump has been unhappy with Powell for not cutting interest rates more quickly, and several Trump allies have expressed frustration over Powell’s comments about the impact of tariffs on inflation. Some in Trump’s orbit have also seen the Fed chair as undercutting the president’s agenda and said Powell has done little to solicit the opinion of the president. Trump has for months mused about firing Powell before his term as chair is up in May 2026, according to people with knowledge of the matter who spoke on the condition of anonymity to reflect private conversations.

The Fed declined to comment on the rhetorical attack. Powell has said flatly that the president doesn’t have the legal authority to dismiss him.

The law that created the Fed says a president is allowed to fire Fed governors only for cause – generally malfeasance of some kind rather than a policy dispute. It is silent on whether the president can demote a top official from a leadership role. The issue hasn’t been previously litigated, and any effort to dislodge Powell now would probably lead to a legal dispute that would have to be settled by the Supreme Court.

While some top Trump advisers have previously said the administration will respect the Fed’s independence around monetary policy, Kevin Hassett, director of the White House National Economic Council, on Friday amplified the president’s displeasure with the Fed leader, saying that Trump is studying whether he’s able to fire the Fed chief.

“The president and his team will continue to study that,” Hassett said when asked by a reporter whether removing Powell was an option, according to Bloomberg News.

On Monday, the S&P 500 index tumbled roughly 2.4%, bringing it more than 15% below its late-February peak.

The Dow Jones Industrial Average also slipped about 2.5%, or about 970 points. Meanwhile, the tech-heavy Nasdaq composite index also fell roughly 2.6% Monday as all of the “Magnificent 7” group of Big Tech companies suffered losses.

Analysts said tech stocks are being swept up in the broader flight of investment capital from the United States. Investors are particularly concerned that the high-tariff regime could bring about stagflation, said Jamie Cox, managing partner at Virginia-based Harris Financial Group, referring to a condition in which growth stalls and inflation rises.

“Ironically, Americans have lost more in buying power of the U.S. dollar than they have gained to date by the government’s spending cuts,” Cox said. “If this continues, any potential tariff benefit will be overwhelmed by the real and immediate deterioration of financial conditions caused by a weak dollar.”