US stocks and the dollar fell again as President Donald Trump strengthened his attack on the US Central Bank boss.
In a social media post, Trump called on Federal Reserve Chairman Jerome Powell to cut interest rates “preemptively” to boost the economy, saying Powell was too late to consistently respond to economic development.
“Unless the losers are too late, the main losers and the interest rates are not lowered, there could be a slower economic slowdown,” he wrote.
Trump’s criticism of Powell’s handling of the US economy comes as his own plans for tariffs pushed for stock market sales and increased fears about the economic recession.
The fierce clash with Powell, whom he nominated to lead the Fed during his first term, added market disruption.
The S&P 500, which tracks the 500 of the largest companies in the US, fell about 2.4% on Monday. From the beginning of the year, it lost about 12% of its value.
The Dow Jones industrial average has fallen by 2.5%, down about 10% so far this year, but the Nasdaq has fallen by more than 2.5%, falling about 18% since January.
Dollars and US government bonds are usually considered safe assets during market turbulence, but have not escaped the recent turbulence.
The dollar’s index, which measures the dollar’s strength, fell to its lowest level on Monday since 2022 – the dollar’s strength against a range of currencies, including the euro.
The interest rates on US government debt also rose as investors demanded higher returns to hold their finances.
Trading on most major stock indexes was curtailed on Tuesday morning.
Japan’s Nikkei 225 and Sydney’s ASX 200 were about 0.1% lower. Hong Kong’s Hangsen fell by about 0.5%.
Meanwhile, gold prices have reached new record highs as investors are looking for so-called “safe haven” assets.
Spot Gold went above $3,400 (£2,563) per ounce for the first time on Monday.
Precious metals are considered safer places to spend money in times of economic uncertainty.
Trump’s criticism of Powell goes back to his first term when he reportedly discussed firing him. Since winning the election, he has urged Powell to lower his borrowing costs.
The latest criticism follows Powell’s warning that Trump’s import taxes are likely to raise prices and slow the economy.
Trump was called publicly to Powell last week to be fired, and wrote on social media Thursday: “Powell’s firing can’t be quick enough.”
Such a move is controversial and legally questionable given the tradition of independence in banks.
Powell told reporters last year that he did not believe the president had the legal authority to eliminate him.
But one Trump’s top economic adviser confirmed that officials were studying options on Friday, when the US stock market was shut down for trading.
