The U.S. dollar has fallen to a three-year low and stocks have sold off heavily as President Donald Trump ratchets up his attacks on Federal Reserve Chair Jerome Powell.
In social media posts issued on April 21, Trump called Powell a “major loser” and demanded that he cut interest rates “NOW” to stimulate the American economy and stock market.
Trump’s comments appear to have had the opposite effect, sending the U.S. dollar down and leading stock indices to tank, with the Dow Jones Industrial Average falling nearly 1,000 points.
The U.S. dollar has now declined 10% in the past three months and is hovering near its lowest level since the bear market of 2022 as President Trump threatens to fire the central bank chair.
At the same time, the price of gold is hitting fresh records, rising above $3,400 U.S. per ounce for the very first time. Gold, a safe haven in times of uncertainty, is up nearly 30% on the year.
Investors and markets have been upended by Trump’s ongoing attacks on the Federal Reserve, fearing that the central bank’s independence is being threatened.
Trump is calling on the Fed to make “pre-emptive cuts” to interest rates as markets and the U.S. economy reel from the president’s trade policies and high import tariffs.
Trump wrote on social media that there is “virtually no Inflation” in the U.S., and that costs for energy are declining.
The president called on “Mr. Too Late, a major loser,” referring to Jerome Powell to “lower interest rates NOW.”
Analysts and economists are warning that any attempt by Trump to fire Powell will lead to an even worse selloff in U.S. equity markets.
Trump’s attacks on Powell come after the central banker said a week ago that tariffs will constrain growth and could fuel inflation, resulting in “stagflation” that is widely viewed by economists as a central bank’s worst-case scenario.
U.S. markets are rising in pre-market trading on April 22 as investors try and recover from the sharp selloff to start the week.