Donald Trump and Federal Reserve Chair Jay Powell are in the spotlight again, with Trump's recent criticism of Powell causing market volatility. Here are the latest updates :
- *Market Reaction*: The dollar hit a three-year low against major currencies, with the dollar index falling to 97.923, its weakest level since March 2022. The S&P 500, Nasdaq composite, and Dow Jones Industrial Average all fell by more than 2% after Trump's posts.
- *Trump's Criticism*: Trump called Powell a "major loser" and demanded immediate interest rate cuts, sparking concerns about political interference in monetary policy. He also suggested that Powell's termination "cannot come fast enough".
- *Powell's Stance*: Powell has made it clear that he doesn't believe Trump has the authority to fire him or other Fed officials serving on the Federal Open Market Committee. Any attempt to do so would likely end up in court.
- *Investor Sentiment*: Investors are worried about the loss of independent monetary policy in the US, leading to a "Sell America" trade, where the dollar loses strength, Treasury yields rise, and stocks decline.
- *Economic Implications*: The market volatility is not just about Trump's threats, but also about his trade war policies and the uncertainty surrounding the US economy. The trade war and tariffs are adding to the market's concerns.
*Key Market Numbers:*
- *Dollar Index*: 97.923, its weakest level since March 2022
- *S&P 500*: Fell by 2.36% to 5,158.20
- *Dow Jones Industrial Average*: Declined by 2.48% to 38,170.41
- *Gold Prices*: Surged to a fresh record high, reflecting a growing risk-off sentiment in global markets.
