Market Jitters Grow as Trump Criticizes Fed Chair Powell Over Interest Rates

US financial markets experienced fresh volatility as President Donald Trump escalated his criticism of Federal Reserve Chair Jerome Powell, blaming him for not lowering interest rates amid economic uncertainties, BBC reports.

The president’s remarks, posted on social media, labeled Powell “a major loser” and urged him to cut interest rates “pre-emptively” to help stimulate growth.

“There can be a SLOWING of the economy unless Mr. Too Late, a major loser, lowers interest rates, NOW,” Trump wrote.

Trump’s comments come at a time when markets are already reacting negatively to his administration’s ongoing tariff policies, which have contributed to a sell-off in equities and renewed fears of a potential recession.

On Monday, US stock indexes suffered notable declines. The S&P 500 fell approximately 2.4%, the Dow Jones Industrial Average also dropped 2.4%, and the tech-heavy Nasdaq lost more than 2.5%. Since the start of the year, the S&P has declined about 12%, the Dow around 10%, and the Nasdaq roughly 18%.

The dollar, often seen as a safe-haven asset during times of market turmoil, also fell. The US dollar index, which measures the currency’s value against a basket of others including the euro, dropped to its lowest level since 2022.

Meanwhile, US Treasury yields continued to climb, indicating investor demand for higher returns amid inflation concerns and uncertainty over interest rate policy. In contrast, gold surged to a record high, surpassing $3,500 per ounce, as investors turned to traditional stores of value in uncertain times.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, noted that the appeal of gold has increased not just because of economic anxiety, but also due to unresolved global conflicts, particularly in Ukraine and Gaza. Additional geopolitical worries, such as competition between the US and Russia in the Arctic, are also feeding investor unease.

In international markets, reactions were more subdued. In Asia, Japan’s Nikkei 225 slipped 0.1%, Australia’s ASX 200 dropped 0.3%, while Hong Kong’s Hang Seng rose 0.3%. European markets opened lower, with Germany’s DAX down 0.5%, France’s CAC falling 0.6%, and the UK’s FTSE 100 edging down 0.05%.

The Fed’s independence has come under increasing scrutiny due to the president’s repeated public criticism of Powell, whom he appointed during his first term. While Trump has previously suggested firing Powell, legal experts and Powell himself have noted that the president may lack the authority to do so.

The escalating tension coincides with the spring meetings of the International Monetary Fund (IMF) and World Bank, where global economic leaders are gathering in Washington. Experts have emphasized the importance of central bank independence in maintaining economic stability.

Christopher Meissner, an economics professor at the University of California, Davis, and a former IMF staffer, noted that modern central banking has largely operated free from political interference for the past few decades.

“This is a major reversal and we have to watch out for it,” he said.

The IMF is expected to release revised global growth forecasts, with several analysts anticipating notable downgrades.

“They used to say ‘When the US sneezed, the rest of the world caught a cold.’ It’ll be curious to see if that continues,” Meissner added.

Streeter noted that confidence in the US as a financial safe haven is being tested, citing bond market movements and policy unpredictability as signs of growing anxiety.