Jerome Powell, chairman of the US Federal Reserve, throughout an Financial Membership of Chicago occasion in Chicago, Illinois, US, on Wednesday, April 16, 2025.
Jamie Kelter Davis | Bloomberg | Getty Photos
President Donald Trump on Monday ratcheted up his stress marketing campaign on Federal Reserve Chairman Jerome Powell, calling him a “main loser” and warning that the U.S. financial system might decelerate except rates of interest are lowered instantly.
“‘Preemptive Cuts’ in Curiosity Charges are being referred to as for by many,” Trump wrote on Fact Social.
Trump claimed that there’s at the moment “just about No Inflation” within the U.S., and that prices for vitality and “most different ‘issues'” are on the decline.
“With these prices trending so properly downward, simply what I predicted they might do, there can nearly be no inflation, however there generally is a SLOWING of the financial system except Mr. Too Late, a significant loser, lowers rates of interest, NOW,” Trump wrote.
Trump’s newest salvo towards Powell — whom he appointed throughout his first administration — got here because the president and his crew are finding out whether or not they can legally hearth the central financial institution chief earlier than his time period expires in Could 2026.
Powell has flatly acknowledged that the president can not take away him below the regulation.
Any try by Trump to fireplace Powell would doubtless set off a steep unload in U.S. fairness markets, Evercore ISI Vice President Krishna Guha advised CNBC on Monday.
“For those who begin to increase questions on Federal Reserve independence, you might be elevating the bar for the Federal Reserve to chop. For those who really did attempt to take away the Federal Reserve chairman, I believe you’ll see a extreme response in markets with yields increased, {dollars} decrease and equities promoting off,” Guha stated on “Squawk Field.”
“I am unable to imagine that that is what the administration is making an attempt to realize,” Guha stated.
The inventory market, already reeling from heightened uncertainty and different considerations stemming from the Trump administration’s sweeping tariff plans, sank additional Monday morning. The Dow Jones Industrial Common tumbled 750 factors, an almost 2% drop, throughout the first hour of buying and selling, whereas the Nasdaq fell 2.6%.
The U.S. greenback, in the meantime, fell to its lowest degree since 2022. The churn in international markets has despatched traders flocking to safe-haven property equivalent to gold, which hit a file excessive worth on Monday, whereas the benchmark 10-year Treasury yield crept up.
Trump’s newest assaults on Powell adopted the central financial institution chief’s suggestion final week that the president’s commerce conflict will constrain development and will gas inflation.
Tariffs are “prone to transfer us additional away from our objectives … most likely for the stability of this yr,” Powell stated on the Financial Membership of Chicago.
Powell additionally stopped wanting suggesting that rate of interest cuts had been on the horizon.
“In the meanwhile, we’re nicely positioned to attend for larger readability earlier than contemplating any changes to our coverage stance,” he stated.
— CNBC’s Alex Harring contributed to this report.
