Markets nosedived on Monday as President Donald Trump blasted Federal Reserve chair Jerome Powell for not cutting interest rates amid waning economic sentiment spurred by Trump’s tariff policies.
Trump escalated his war of words against Powell in a Truth Social post on Monday morning.
Trump called Powell “a major loser” after nicknaming him “Mr. Too Late” and told him to lower interest rates immediately.
“There can be a SLOWING of the economy unless Mr. Too Late, a major loser, lowers interest rates, NOW,” Trump wrote on social media.
The Dow Jones Industrial Average of big U.S. stocks was down more than 940 points, or more than 2.4 percent, on the day as of 11:30 a.m. on Monday. The S&P 500 was down more than 2.5 percent, and the technology-heavy Nasdaq Composite was down almost 2.9 percent.
Securities markets have fallen off a cliff in recent weeks as Trump has ramped up his trade war.
Despite a rebound when Trump announced a 90-day pause on most tariffs, the Dow has lost more than 9 percent of its value over the past month while the S&P 500 has lost more than 9.2 percent and the Nasdaq has lost more than 11 percent.
As Powell has maintained the Fed’s pause on interest rate cuts amid inflationary pressures resulting from Trump’s tariff policies, the president has become increasingly angry at the Fed chair.
White House National Economic Council director Kevin Hassett told reporters last week that the administration was looking at ways to remove Powell from his position, though the Fed is an independent agency and set up to be insulated from political pressures.
“The President and his team will continue to study that matter,” Hassett said on Friday.
Legal experts told The Hill that while Trump may be able to pressure Powell out of the chair, he likely does not have the legal authority to remove Powell as one of the Fed’s governors.
“Powell’s termination cannot come fast enough!” Trump wrote in a social media post on Friday.
On Monday, Trump said that “preemptive cuts” in interest rates were “being called for by many.”
Powell has made no secret of his view that Trump’s tariffs raise the risk of “stagflation,” in which rising prices collide with stagnant economic growth, punishing consumers.
“The level of the tariff increases announced so far is significantly larger than anticipated,” Powell said in a speech last week. “The same is likely to be true of the economic effects, which will include higher inflation and slower growth.”
