US markets began the week in red as President Donald Trump launched a fresh attack against Federal Reserve Chair Jerome Powell on Monday. The Dow Jones Industrial Average plummeted more than 1,000 points while the dollar index hit a three-year low. The ‘Magnificent Seven’ tech giants were also seen trading significantly lower as the POTUS reiterated calls for interest rates to be lowered immediately.
The Dow Jones Industrial Average dropped more than 1,000 points while the Nasdaq Composite sank 2.9% on Monday. The S&P 500 fell 2.6% to stand 16% below its record set two months ago. Big Tech stocks led the way lower ahead of earnings reports coming this week from Tesla and others. Perhaps more worryingly, the value of the US dollar also sank as a retreat continues from US markets. The yield on the 10-year Treasury briefly topped 4.40% before regressing.
The Trump administration has been looking into the possibility of firing Powell in recent days amid growing concern about the Fed’s independence in setting monetary policy path and about the outlook for US assets. The Fed has left its benchmark policy rate on hold in the range of 4.25% to 4.50% since December following a series of rate cuts late last year. Lowering the rates too quickly can allow inflation to reaccelerate after it has slowed nearly all the way down to its 2% goal from more than 9% three years ago.
“…there can be a SLOWING of the economy unless Mr. Too Late, a major loser, lowers interest rates, NOW. Europe has already ‘lowered’ seven times. 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? (sic)” the President jibed on a Truth Social post.