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Wall Street stocks and the dollar fell amid increasing uncertainty over the US economy as President Donald Trump renewed his attack on Federal Reserve Chairman Jay Powell.
In a post on his true social platform on Monday morning shortly after the market opened, Powell, whom Trump called “Mr Mr Too Leter,” said interest rates should be reduced “now” to stimulate the economy.
U.S. stocks have gone lower, but the sale has escalated after Trump’s social media post targeted central bankers. The S&P 500 finished the session 2.4 percent lower, with more than nine of its 10 shares in its constituent stocks in negative territory. High-tech Nasdaq composites fell by 2.6%.
The market moves say that Kevin Hassett, director of the National Economic Council, on Friday he will “continue to study” the issue of dismissing Powell after Trump claimed he was entitled to fire the Fed chairman the day before.
The president has repeatedly criticised Powell for not lowering interest rates quickly enough, but the Fed chair said he would not be affected by political pressure.
“If you don’t think it’s acceptable for President Trump to be unhappy with the Fed’s policy history, I think you explained to him to do so,” Hassett told reporters in Washington on Friday.
The dollar fell 1.5 percent on Monday to its three-year low against its major trading partner basket, with the euro reaching 1.1 percent to $1.154, while the yen was 0.9 percent at 140.84 yen.
The US sovereign debts have been sold. The US Treasury’s 10-year yield rose 0.08 percentage points at 4.41% after Trump’s latest social media post. Bond yields move inversely to the price.
“The idea that Powell could be out will definitely bring real fear to the market. He’s a known amount of sanity voice.”
Gray said Monday’s flight from dollar-controlled assets also reflected broader concerns about increasingly unstable US policymaking. “Trump can’t be trusted. He can’t be trusted. What many foreigners are surmising from Trump’s two-time elections is that America itself cannot be trusted or dependent on decades.”
Yujiro Goto, a forex strategist at Nomura Securities, said that bond sales and currency depreciation are rare in major reserve currency markets such as the US.
GoTo believes the rise in the yen is attributed to US concerns about “distrust in the credibility of stags” and “increasing credibility of male dogs.”
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In a report on Sunday, analysts at CICC, a Chinese investment bank, said uncertainty in U.S. policies in the country has led to the dollar and the Treasury “behavioring like a risky asset.”
They added that Trump’s recent remarks about Powell “has raised market concerns about the independence of the Federal Reserve.”
In an investor’s note, Michael Feroli, US Economics President at JPMorgan, said:
The central bank has put on rates so far this year after three cuts in 2024. The next meeting will be in May.
The Fed sets monetary policy independent of other sectors of the government. According to investors and analysts, attempts to expel Powell, whose term is due to end in May 2026, or pressure monetary policy, could cause disruption to the US market.
Additional Reports by Cheng Leng in Hong Kong
