President Donald Trump intensified his criticism of Federal Reserve Chairman Jerome Powell on Monday, demanding (or practically begging for) “preemptive cuts” in interest rates — comments that triggered sharp sell-offs in US markets. The S&P 500 tumbled 2.4% following Trump’s remarks, while the Dow Jones Industrial Average plunged nearly 1,000 points, shedding 2.5% of its value.
In a post on Truth Social, Trump referred to Powell as “Mr. Too Late, a major loser,” criticizing the chairman’s timing on monetary policy decisions. He noted that Europe has already reduced rates seven times, accusing Powell of consistently lagging behind, except during the election period, when he alleged the Fed chair moved to help Democratic candidates.
The president’s remarks came just days after he ratcheted up pressure on the Fed, with sources indicating he has been unhappy with Powell for not implementing rate cuts quickly enough.
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Read: Trump Calls Powell ‘Too Late and Wrong,’ Says Termination ‘Cannot Come Fast Enough’
Some Trump allies have reportedly expressed frustration over Powell’s comments about the impact of tariffs on inflation. The Fed chairman has previously stated that inflation could potentially increase due to the administration’s trade policies.
Market analysts directly linked Monday’s sell-off to Trump’s latest broadside against Powell, noting that US stocks had already been contending with pressures from his tariff policies. Following Trump’s comments, the US dollar strengthened by an additional 1% against several major currencies, potentially complicating American exports and further unsettling investors.
The Fed has maintained its independence throughout these public disagreements, with Powell asserting that the central bank makes decisions based on economic data rather than political pressure. The chairman’s term runs until May 2026, and legal experts indicate that any attempt to remove him would likely trigger a constitutional dispute requiring Supreme Court resolution.
Wall Street firms increasingly foresee a US economy entering recession. Meanwhile, economic indicators suggest inflation remains above the Fed’s 2% target, with price growth accelerating in February, contrary to the president’s claims.
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