Markets were rocked this week after former President Donald Trump ramped up his attacks on Federal Reserve Chair Jerome Powell, blaming him for not acting fast enough to lower interest rates. In a fiery social media post, Trump labeled Powell “a major loser” and urged the Fed to cut rates “pre-emptively” to prevent an economic slowdown.
Trump’s harsh criticism came amid growing recession fears sparked by his own tariff policies, which have already triggered sharp sell-offs on Wall Street. The S&P 500 dropped by 2.4% on Monday, and major indexes like the Dow and Nasdaq followed suit, each falling more than 2%. Since the beginning of the year, markets have seen double-digit losses.
Despite global economic worries, trading across Asia and Europe remained relatively calm. Japan’s Nikkei and Australia’s ASX 200 dipped slightly, while Hong Kong’s Hang Seng showed a modest gain. In Europe, early trading saw minor declines across major markets like the FTSE 100, Germany’s DAX, and France’s CAC 40.
Traditionally considered a safe haven, the US dollar also slumped, with the dollar index dropping to its lowest point since 2022. Government bonds, too, saw rising interest rates, indicating that investors are demanding more returns amid uncertainty.
Meanwhile, gold prices soared to an all-time high of $3,500 per ounce. Analysts say escalating global conflicts and lack of resolution in Ukraine and Gaza are driving investors toward the precious metal as a refuge from market volatility.
Trump’s feud with Powell isn't new, but the intensity has grown. Last week, Trump even called for Powell’s termination—a move that would challenge the Fed’s long-standing independence. Powell has previously stated that the president does not have the legal authority to remove him.
With markets on edge and global tensions rising, all eyes are now on the Fed’s next move—and how Trump’s continued criticism might shake things up even further.
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