Former President Donald Trump has escalated his attacks against Federal Reserve Chairman Jerome Powell. Behind the scenes, he is probably proposing that Powell should be subject to firing. This highly unusual move has caused ripples across U.S. financial markets, resulting in a massive drop in major stock indexes.
Just look at economy on Truth Social Last week, Trump said on Truth social. He cautioned that it would almost certainly decelerate without the Federal Reserve making aggressive interest rate cuts soon. He issued a call for levies to go into effect on April 2. His comments came along with this big announcement. After this declaration, the three largest indexes tanked over 9%, striking terror into the collective hearts of investors.
Trump’s posts made sharp attacks against Powell, calling him “Mr. Too Late” and a “big loser.” These statements have only added to the confusion in an already skittish market, as investors adjust to what his unprecedented condemnation might mean. Moreover, Trump’s camp is supposedly looking into the possibility of firing Powell, adding to the already tumultuous economic picture.
“There’s just so much uncertainty right now with the tariff cycle and with the economy,” – Larry Tentarelli, founder of the Blue Chip Daily Trend Report.
Market analysts have very explicitly pointed to the surge in volatility across financial markets in recent weeks as a direct consequence of Trump’s reckless tweeting. His blistering critique of Powell has shaken Wall Street to its core. Second, the specter of additional tariffs has driven a lot of these same investors into the safety of lower-risk assets. You know Trump’s made it bad when his comments have depressed stock prices. They have ignited calls for reexamination of the future course of U.S. monetary policy itself.
Despite the turmoil, Powell has made it clear that he intends to serve through the end of his term in May 2026, asserting that he cannot be dismissed under current law. This release is in direct response to Trump’s recent continued public pressure and speculation about his position at the Federal Reserve.
The confusion caused by the mixed signals from Trump’s rhetoric and his administration’s overall agenda is still leaving an un-investable climate for investors. As Trump’s team digs into the legality and practicality of a Powell termination, market players are understandably nervous with the prospect of more chaos.