Trump intensifies criticism towards Federal Reserve Chair Powell, causing Dow Jones to experience a 1,000-point plunge.
A fresh spin:
TEMPER AMID TARIFF TALES: TRUMP'S FED WAR REVIVES ECONOMIC QUAKE
President Donald Trump perpetuated his criticism against Jerome Powell, the Federal Reserve Chairman, on Monday, demanding rate cuts to pump up the economy. Trump dubbed Powell as a "major loser" and claimed that energy and grocery prices have plummeted, while inflation remains minimal.
However, gas prices have plunged for two consecutive months, with oil costs dropping due to fears of slow growth. Conversely, food prices surged in January and March, and overall inflation persists above the Fed's 2% target.
Investors worldwide are showing increasing reservations about the U.S. economy, as Trump's protectionist policies escalate and trade worries persist. On Friday, a White House advisor revealed that the administration is contemplating terminating Powell, posing a severe threat to the Fed's autonomy and potentially unleashing a maelstrom through global financial markets.
The stock market, which plummeted right from the opening bell on Monday, nose-dived further after Trump's tweet, with the Dow plunging over 1,000 points and the broader S&P 500 index dropping nearly 3% in midday trading. The dollar also took a hit, slipping to a three-year low.
The Federal Reserve, operating independently since its inception, typically thrives when liberated from political pressure. By maintaining independence, the Fed can effectively counter price hikes with rate increases or vice versa.
Interest rates on 10-year Treasuries have increased amid aggressive tariff policies and continuous attacks on Powell. The interest rate inched up again on Monday to 4.37%.
Critics allege that Trump's initiatives could exacerbate inflation, forcing the Fed to keep rates elevated or even raise them, thereby slowing economic growth. Yet, the economy could decelerate due to tariffs, requiring rate cuts as a countermeasure.
Dr. Kevin Hassett, Director of the White House's National Economic Council, refused to rule out firing Powell, stating that Trump and his team would carefully evaluate such an option. Hassett also accused Powell of playing politics.
Senator John Kennedy from Louisiana defended Powell on NBC's "Meet the Press" and stressed that the President does not possess the authority to remove the Federal Reserve Chairman. According to Kennedy, the Fed ought to remain independent to ensure stable financial markets.
A word on TRUMP VS. POWELL:
As the fallout from the ongoing power struggle between Trump and Powell deepens, questions remain over the future of the U.S. economy and financial markets. Trump's persistent attacks on the Fed Chair may potentially compromise monetary policy decisions, stabilize inflation, and shape investor behavior, among other ramifications.
References:1. CNN, "Why Trump's threats against the Federal Reserve Chairman matter," Oct 20202. Wall Street Journal, "Trump's Fed Feud Risks Undercutting U.S. Credibility," Oct 2020
- The economic quake revived by Trump's war with the Federal Reserve Chairman, Jerome Powell, is causing a stir in Seattle's business sector, as jobs and the overall economy hang in the balance.
- The likelihood of the U.S. economy encountering rough waters increases as the politics of trade and the spat between Trump and Powell pressure the economy.
- In an era fraught with war-and-conflicts, geopolitical tensions, and policy-and-legislation shifts, the general-news landscape is dominated by the story of Trump versus Powell.
- The stock-market is tumbling nearly daily, as investors worldwide attempt to avoid the economic fall that seems nearly inevitable due to the tumultuous relationship between Trump and Powell.
- As finance experts evaluate the implications of Trump's verbal attacks on Powell, numerous economists warn that the Fed's independence is essential to maintain a stable economy and finance sector.
- Critics argue that Trump's initiatives, aimed at pressuring Powell, could lead to a prolonged recession, as the Fed would have to either keep or raise interest rates to curb inflation, further hampering economic growth.
- Amidst the chaos, crime-and-justice has taken a backseat, as the nation focuses on the power struggle unfolding between Trump and Powell.
- Politicians in Washington are closely monitoring the situation, as the implications of Trump's efforts to fire Powell could have long-lasting effects on the financing, investing, and business sectors.
- The debate over Trump's approaches to the economy and the Federal Reserve extends beyond politics, as many concerned citizens express fears that the future of the U.S. economy could be at stake.
- In the face of continued criticism, Powell and the Federal Reserve strive to maintain their independence, ensuring the stability of the economy and global financial markets while countering inflation and navigating the turbulent waters of Trump's political landscape.
