US Stocks and the dollar fell again after President Donald Trump escalated his attack on the US central bank chief, calling him a “big loser” for not lowering interest rates. Fears that the US President could try to push the central bank chief out of office fueled a withdrawal of many investors from the US stock market on Monday. The Dow Jones Industrial closed 2.48 percent lower at 38,170.41 points. The tech-heavy Nasdaq 100 lost 2.46 percent to 17,808.30 points and the S&P 500 gave up 2.4 percent.
Earlier in the week, Trump’s economic adviser Kevin Hassett said the President is considering whether he can fire Powell. His term as head of the US central bank, the Federal Reserve, runs until May 2026 and Powell has made clear that he intends to fulfill it.
In a social media post, Trump demanded that Federal Reserve Chairman Jerome Powell lower interest rates “preemptively” to boost the economy and said Powell has always reacted too late to economic developments. “Unless Mr. Too Late, a big loser, lowers rates now, a slowdown in the economy could happen” he wrote.
Powell wants to keep interest rates due to rising inflation risks after Trump’s recent tariff round. Many economists warn that a consequence of the global trade conflict could be slower economic growth or even a recession in the US. Lower interest rates could, however, accelerate inflation.
Trump’s criticism of Powell dates back to his first term, when he reportedly also considered firing him. Since his election, he has urged the US central bank chief to lower borrowing costs. The recent criticism follows Powell’s warnings that Trump’s import tariffs will likely push up prices and slow down the economy.