"US Stocks Slide, Dollar Drops as Trump Escalates Criticism of Fed Chair Powell"

US Markets Sink as Trump’s Attacks on Fed Chair Powell Shake Investor Confidence

US stocks and the dollar tumbled on Monday as renewed attacks by former President Donald Trump on Federal Reserve Chair Jerome Powell rattled investor confidence and stoked fears over the central bank’s independence.

The S&P 500 fell 2.36 percent, marking one of its steepest declines this year, while the tech-heavy Nasdaq Composite dropped 2.55 percent — leaving it nearly 18 percent lower year-to-date. The dollar also slid to a three-year low, dipping to 97.923 against a basket of major currencies.

Government bond prices declined as investors pulled out of traditional safe havens, pushing the yield on 10-year Treasury notes above 4.4 percent.

Markets in Asia opened lower on Tuesday, with Japan’s Nikkei 225, Hong Kong’s Hang Seng Index, and Taiwan’s TAIEX down between 0.5 and 0.8 percent by 02:00 GMT, following the Wall Street selloff.

The downturn comes amid a fresh round of criticism from Trump, who labeled Powell a “major loser” and “Mr Too Late” on social media for not acting faster to cut interest rates. Trump, who has repeatedly threatened to remove Powell, said last week his termination “cannot come fast enough.”

White House economic adviser Kevin Hassett confirmed Friday that the administration is exploring legal avenues to remove Powell, whose current term ends in May next year.

Since its latest rate cut in December, the Fed has signaled a cautious stance on further easing, citing risks from Trump’s tariffs, which Chair Powell warned could fuel inflation while simultaneously slowing growth and raising unemployment.

Analysts have raised concerns about the potential erosion of central bank independence. “Markets understand this and are worried that President Trump may try to undo the Fed’s longstanding protection against political interference,” said Joseph E. Gagnon of the Peterson Institute for International Economics.

Trump’s efforts could test a 1935 Supreme Court precedent that prevents the president from dismissing the heads of independent agencies without cause. Any move to oust Powell is expected to trigger major market turbulence and legal battles.

Federal Reserve Bank of Chicago President Austan Goolsbee cautioned against political interference, warning on CNBC that it could lead to “higher inflation, worse growth, and higher unemployment” in the long run.

“The probability of presidential interference is rising,” Gagnon added. “Investors may begin to lose confidence in the US economy’s ability to perform if the Fed’s independence is undermined.”