U.S. Stock markets opened the day down and then fell further after U.S. President Donald Trump said Federal Reserve Chair Jerome Powell is a “major loser.”
Trump said there’s a chance the U.S. economy will slow down if Powell doesn’t act soon to lower interest rates, which remain high as the central bank attempts to mitigate ongoing inflation seen since the end of the COVID-19 pandemic.
The president proclaimed on Monday that “preemptive cuts” in the Federal Reserve’s key rate “are being called for by many,” though he provided no reference for his claim. He said the price of energy was “way down” and that consumers are seeing “substantially lower” prices for food and eggs.
According to Trump, “there is virtually no inflation.”
“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,” the 47th U.S. President said.
“Europe has already ‘lowered’ seven times. Powell has always been ‘To Late,’ [sic] except when it came to the Election period when he lowered in order to help Sleepy Joe Biden, later Kamala, get elected,” he continued. “How did that work out?”
While gas prices have dropped over the last two months as oil markets tumble in the face of growth fears, food prices jumped in both January and March, Grade A large eggs reached a record high of $6.23 per dozen last month, and inflation remains above the federal reserves 2% target.
The markets were quick to react to Trump’s assertions and his attack on Powell, who before Trump took office was thought to be successfully overseeing a so-called soft landing from inflation’s 2022 peak.
Just last week, White House economic adviser Kevin Hassett said Trump was looking at ways to fire the Federal Reserve Chairman, who he appointed to the role in 2019. The job is typically are protected from political interference and chairs are allowed to serve out their full four-year terms. Powell’s current term as chair, his second, is scheduled to end in May of 2026.
After opening more than 200 points down from its 39,142.23 close on Friday, the Dow Jones Industrial Average fell by more than 1,200 points through the day before rallying slightly ahead of the closing bell to end down by 971.82 points, or about 2.5%, at 38,170.41.
The S&P 500 also opened down, fell further, and then rallied slightly ahead of market closure, losing 124.50 points by the end of the day, or 2.4%, to close at 5,158.20.
The Nasdaq composite was not spared, opening down by more than 200 points and ending the day down by 415.55 points, or 2.6%, at 15,870.90.
The value of the U.S. dollar also continued a downward slide, and the ICE U.S. Dollar Index fell to 97.92 on Monday — the lowest point seen since March of 2022 — before moving upward slightly to 98.38 at close.
The dollar index hit a two year high in early January ahead of Trump’s inauguration, and has fallen more than 10% since.