Trump's Criticism of Powell Sends Dollar to 3-Year Low, Stocks Plunge

Trump has escalated his criticism of the Federal Reserve, urging immediate interest rate cuts to support the economy. He has repeatedly labeled Fed Chair Jerome Powell as a "major loser" and warned that the economy could decelerate without rate reductions. This rhetoric has contributed to the uncertainty surrounding the U.S. economy, which is already dealing with trade tensions and concerns about the central bank's independence.

Trump's latest criticism of Powell comes as the U.S. dollar hits a three-year low, dropping more than 1.5% against the Swiss franc. The dollar's decline reflects growing concerns about the economic outlook and the potential impact of Trump's tariff policies. The yield on the 10-year Treasury note, which affects borrowing costs on all sorts of loans, was at 4.42%, up from 4.33%. Yields rise when bond prices fall, and they've increased substantially this month amid the market turmoil. Gold futures were up 3.2% at about $3,435 an ounce in late trading, after hitting another record high of just above $3,440 this morning, as investors turn to the precious metal as a safe haven.

Trump's criticism of Powell has also raised concerns about the independence of the Federal Reserve. Investors are worried that an abrupt dismissal of the Fed chair, whose term runs for about another year, would further destabilize global markets. Last week, Trump said Powell's "termination cannot come fast enough," while White House economic advisor Kevin Hassett said the president is evaluating ways to possibly dismiss Powell.

The economic uncertainty has also affected the stock market, with the S&P 500 and tech-heavy Nasdaq Composite shedding 2.4% and 2.6%, respectively, while the Dow Jones Industrial Average slipped 2.5%, or nearly 1,000 points. Stocks lost ground last week, giving back a portion of the previous week's big gains, as trade tensions with China intensified and Federal Reserve Chairman Jerome Powell said that tariffs would cause inflation to rise and economic growth to slow, posing a challenge for the central bank as it decides where to set interest rates.

China has said it would retaliate against countries that cooperate with the U.S. on trade deals that hurt China's interest. The Trump administration, which has imposed new tariffs on countries around the world, including a 145% import tax on goods from China, has said it is in negotiations with dozens of countries.

Adding to the mix, Trump on Monday reiterated his criticism of Powell, calling the Fed chair a "major loser" and saying that interest rates should be lowered immediately. Investors are concerned that an abrupt dismissal of the Fed chair, whose term runs for about another year, would further destabilize global markets. Last week, Trump said Powell's "termination cannot come fast enough," while White House economic advisor Kevin Hassett said the president is evaluating ways to possibly dismiss Powell.