Wall Street experienced a significant downturn on Monday, with major indices reaching their lowest points in over a week. This decline came after U.S. President Donald Trump intensified his criticism of Federal Reserve Chair Jerome Powell, raising serious concerns about the independence of the central bank and unsettling investors.
Trump’s Criticism of the Fed
In a post on Truth Social, Trump emphasized that the economy risks slowing if interest rates are not cut immediately. His remarks echoed those of Kevin Hassett, an economic adviser to the White House, who suggested on Friday that Trump’s administration might consider the possibility of dismissing Powell.
- Key Points:
- Trump’s statements have heightened investor fears regarding the Fed’s ability to set monetary policy independently.
- These concerns are particularly impactful given the existing apprehensions about U.S. investments, which have already been affected by Trump’s tariff policies.
Market Reaction
The S&P 500 fell sharply by 3.35% by the afternoon, while the Nasdaq Composite and Dow Jones Industrial Average saw declines of 3.63% and 3.26%, respectively. Trading volumes were lighter than usual, attributed to many international markets being closed for the Easter holiday.
- Market Performance:
- S&P 500: -3.35%
- Nasdaq Composite: -3.63%
- Dow Jones: -3.26%
- U.S. Dollar Index: -0.47%
- 10-Year Treasury Yield: Increased by 7.4 basis points to 4.4008%
Investor Sentiment
The ongoing criticism from Trump has led to a deterioration of confidence among investors, particularly regarding U.S. assets. The fear is that the political pressure on the Federal Reserve could impede its ability to make crucial decisions for the economy without external influence.
In summary, as Wall Street grapples with these developments, the focus remains on how the administration’s stance towards the Federal Reserve will shape economic policies moving forward. Investors are left to navigate a landscape marked by uncertainty and heightened volatility.
