U.S. stock markets plunged on Monday following a scathing attack by former President Donald Trump on Federal Reserve Chair Jerome Powell, blaming him for not lowering interest rates amid growing economic concerns linked to ongoing tariff policies.
In a fiery post on Truth Social, Trump reignited his feud with Powell, labeling him “a major loser” and dubbing him “Mr. Too Late” in reference to what he sees as delayed economic action. Trump urged the Federal Reserve to implement immediate interest rate cuts to prevent further economic slowdown.
“There can be a SLOWING of the economy unless Mr. Too Late, a major loser, lowers interest rates, NOW,” Trump posted on Monday morning.
By midday, the Dow Jones Industrial Average had dropped more than 940 points (over 2.4%), while the S&P 500 slipped 2.5% and the Nasdaq Composite fell nearly 2.9%, reflecting widespread investor anxiety.
Market Volatility Driven by Tariff Tensions and Fed Inaction
U.S. financial markets have been experiencing heightened volatility in recent weeks as Trump escalates his trade war strategy. Although stocks briefly rebounded after Trump announced a 90-day suspension on certain tariffs, major indexes continue to show steep losses:
- Dow Jones: Down over 9% in the past month
- S&P 500: Declined by more than 9.2%
- Nasdaq Composite: Dropped over 11%
Trump’s growing frustration with Powell comes as the Federal Reserve maintains its stance against cutting interest rates too soon—citing inflation concerns exacerbated by ongoing tariff impacts.
Trump Pressures Fed Amid Legal Limitations
Last week, White House National Economic Council Director Kevin Hassett confirmed the administration was exploring ways to remove Powell from his position—despite the Fed’s independence from political interference.
“The President and his team will continue to study that matter,” Hassett said on Friday.
However, legal experts emphasize that Trump likely lacks the authority to dismiss Powell as a Federal Reserve governor, even if he could force him out of the chairmanship role.
“Powell’s termination cannot come fast enough!” Trump declared in a separate post on Friday.
On Monday, Trump doubled down, saying that “preemptive cuts” to interest rates were being widely recommended by economic experts.
Powell Warns of Tariff-Driven Stagflation Risk
Federal Reserve Chair Jerome Powell has consistently warned that Trump’s tariff policies heighten the risk of stagflation—a damaging mix of rising prices and stagnant growth that burdens consumers and stifles economic momentum.
As the clash between the former president and the Fed intensifies, investor uncertainty continues to mount—fueling one of the sharpest market downturns of the year.