U.S. stock markets tumbled Monday as former President Donald Trump intensified his public attacks on Federal Reserve Chair Jerome Powell, calling him “a major loser” and demanding immediate interest rate cuts. The pressure comes amid market volatility triggered by Trump’s proposed tariffs, which have reignited concerns about inflation and economic stability.
Trump took to social media, urging Powell to “lower interest rates, NOW,” blaming him for the risk of a slowing economy. The outburst follows recent tariff announcements that have rattled investors and pushed the dollar to multi-year lows. Major indices responded sharply— the Dow dropped 2.5%, the Nasdaq fell over 2.5%, and the S&P 500 declined by 2.4%.
High-profile tech stocks, including Tesla and Nvidia, led the downturn, reversing gains made during a brief market rebound following Trump’s 90-day pause on tariff implementation. That rally has now been nearly wiped out.
Despite the political pressure, Powell has maintained a cautious stance, warning that tariffs could fuel inflation and make monetary policy more complex. “Tariffs are highly likely to generate at least a temporary rise in inflation,” Powell said, emphasizing the Fed’s dual mandate to control inflation and support employment.
U.S. inflation, once at a peak of 9% in 2022, has dropped to 2.4%, thanks largely to the Fed’s strategic rate hikes. However, Powell signaled no immediate plans for rate cuts, citing concerns over persistent inflationary pressures from the new tariffs.
Trump has also floated the possibility of firing Powell before the end of his term in May 2026—an unprecedented move that would challenge the Fed’s longstanding independence. Legal experts remain divided on whether such a dismissal is possible, as the U.S. Supreme Court considers a broader case that could redefine presidential authority over federal agencies.
Fed officials are set to meet again on May 6–7 to evaluate potential policy adjustments. Until then, the market remains jittery over the growing tension between political rhetoric and central bank policy.