Dow Dives as Trump Turns Up the Heat on Fed Chair Powell
Well, it’s been a rough day on Wall Street, and the headlines are buzzing—again. The U.S. stock markets are taking a hit, and this time, the spotlight is on a dramatic clash between President Donald Trump and Federal Reserve Chair Jerome Powell. The Dow Jones dropped over 1,000 points Monday morning, tumbling nearly 2.9%, while the S&P 500 slid 2.9% and the tech-heavy Nasdaq sank more than 3%. And if that wasn’t enough to rattle investors, tech giants like Tesla and Nvidia saw their stocks plunge over 5%.
So what’s going on? It all started—again—with Trump taking to social media to call Powell “a major loser,” accusing him of dragging his feet on lowering interest rates. Trump insists the economy is facing a slowdown, not inflation, and he wants the Fed to step in with aggressive rate cuts to counter the blowback from his latest round of tariffs.
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According to Trump, “There’s virtually no inflation,” pointing out falling energy and food prices. But Powell isn’t budging. In fact, just a few days ago, he warned that tariffs could actually increase inflation, not reduce it. He made it clear that the Fed isn’t planning to cut rates any time soon, calling the tariff-driven economic outlook “challenging.”
This brewing conflict between the White House and the Federal Reserve is no small matter. Historically, the Fed has been independent from politics—a necessary buffer to ensure it focuses on long-term economic stability rather than short-term political gain. But Trump is now openly floating the idea of firing Powell, whose term doesn’t end until May 2026. That would be unprecedented and would send even more shockwaves through the financial markets.
Economists and market analysts are already sounding the alarm. If Trump really tries to oust Powell, it could destroy investor confidence, destabilize bond markets, and spike long-term interest rates. One analyst even said, “If we lose the Fed’s independence, we lose our economy’s secret sauce.”
Adding fuel to the fire, the dollar is falling, treasury yields are jumping, and fears of a recession are creeping in. Wall Street, already jittery from Trump’s tariff policies, is now dealing with the uncertainty of whether the central bank can even stay politically insulated.
This is one of those moments where politics and economics collide—and it’s not pretty. Whether Trump’s pressure tactics will pay off or backfire remains to be seen. But for now, the markets are clearly saying: they’re not buying it.
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