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The stocks of Wall Street and the dollar fell in the midst of the growing uncertainty about the US economy when President Donald Trump renewed his attacks against the president of the Federal Reserve, Jay Powell.
In a publication on its real social platform on Monday morning shortly after the markets were opened, Trump said Powell, whom he called “Mr Too Late”, should reduce interest rates “now” to stimulate the economy.
The US shares opened lower, but the mass sale intensified after Trump’s social media post points to the central banker. The S&P 500 finished session 2.4 percent lower, with more than nine in 10 of its constituent actions in negative territory. The compound Nasdaq Technological Heavy fell 2.6 percent.
Market movements occurred after Kevin Hasett, director of the National Economic Council, said Trump “would continue to study” the issue of dismissing Powell after the president said the previous day that he had the right to fire the Fed chair.
The president has repeatedly criticized Powell for not reducing interest rates sufficiently enough, while the president of the Fed has said that he would never be influenced by political pressure.
“If you think it is unacceptable that President Trump feels frustrated with the Fed policy history, then I think you … I have some explanation,” Hassett told journalists in Washington on Friday, when US markets were closed.
The dollar fell up to 1.5 percent to a minimum of three years against a basket of its large commercial partners on Monday, while the euro earned 1.1 percent to $ 1,154 and YEN was 0.9 percent firmer to ¥ 140.84 per dollar.
The American sovereign debt was sold. The 10 -year United States Treasury yield increased 0.08 percentage points by 4.41 percent after Trump’s latest publication. Bond yields move inversely to prices.
“The idea that Powell could be out definitely put a real fear in the market. It is a voice of sanity, a known amount,” said Steven Gray, Gray Value Management investment director.
The Monday flight of the assets called dollars also reflected broader concerns about the formulation of increasingly volatile US policies, Gray said. “Trump is not reliable, it cannot be trusted that many foreigners infer that Trump is chosen twice is that the United States cannot trust or trust to the extent that it has been for many decades.”
Yujiro Goto, Nomura Securities Forex strategist, said the combination of bond liquidations and monetary depreciation at the same time was rare in an important reserve currency market like the United States.
Goto attributed the increase in Yen to concerns about the “stagflation” of the United States and the “growing distrust in the credibility of the asset of the United States.”
Cicc analysts, the Chinese investment bank, said in a report on Sunday that the uncertainty of the national policy of the United States was leading the dollar and treasure bonds to “behave more as risk assets.”
They added that Trump’s recent comments about Powell “further increase market concerns about the independence of the Federal Reserve.”
Michael Feroli, an EE.
So far, the Central Bank has kept the rates waiting this year after reducing them three times in 2024. Its next meeting is in May.
The Fed establishes monetary policy regardless of the other branches of the government. Any attempt to expel Powell, whose term is scheduled to end in May 2026, or the monetary pressure policy could cause greater agitation in the market in the United States, according to investors and analysts.
Additional Cheng Leng reports in Hong Kong
