U.S. stocks plunged sharply Monday after President Trump lobbed new insults at Fed Chair Jerome Powell, again pressuring him to lower interest rates
In a post on Truth Social at 9:41 a.m., Trump claimed that “preemptive cuts” were being called for “by many” now that the economy was facing what he described as “virtually No Inflation.” He didn’t say who has called for the pre-emptive cuts, which the Fed rarely performs.
Without the cuts, Trump said, the economy now risks slowing, “unless Mr. Too Late, a major loser, lowers interest rates, NOW.”
“Powell has always been ‘To Late,’ except when it came to the Election period when he lowered in order to help Sleepy Joe Biden, later Kamala, get elected. How did that work out?”
Though Trump has long criticized Powell, whom he appointed during his first term, the president’s complaints have ramped up in recent days amid a major market reaction to his tariffs shock.
Economic adviser Kevin Hassett also said last week that the administration was “study(ing)” Trump’s options for removing Powell.
Firing Powell would be an unprecedented move: No president has ever removed a sitting Fed chair. The Fed has historically been a nonpolitical part of the government, and the prospect of Trump taking action has sparked concern that inflation would surge as he forced the central bank to ease up on its role of controlling price growth in favor of economic growth.
Markets extended their losses after the post, and by 1:30 p.m. ET saw some of the largest intra-day declines in weeks. The S&P 500 was down more than 3%, and has now declined 17% from its February peak. At 20%, it will enter a bear market.
The Dow Jones Industrial Average declined 1,100 points, or about 2.9%. The Nasdaq fell 3.4%.
