President Donald Trump’s intensifying attacks on Federal Reserve Chair Jerome Powell have created another wave of anxiety for investors already rattled by tariffs, a weakening dollar, and Big Tech’s AI reset.
Last week, rumors circulated that Trump was actively considering Powell’s removal, reigniting a long-standing feud. Trump confirmed the speculation on April 17, telling reporters, “If I want [Powell] out, he’ll be out of there real fast, believe me.” He doubled down Monday via Truth Social, accusing Powell of risking a slowdown by not cutting interest rates immediately.
“There can be a SLOWING of the economy unless Mr. Too Late, a major loser, lowers interest rates, NOW,” Trump wrote.
📉 Wall Street Reacts to Fed Uncertainty and Trade Tensions
U.S. markets slumped Monday in response to escalating uncertainties. The S&P 500 (^GSPC), Dow Jones Industrial Average (^DJI), and Nasdaq Composite (^IXIC) all fell over 2%, signaling rising investor discomfort with the administration’s rhetoric and policy pivots.
Market data – April 21 close:
- S&P 500: -2.36%
- Dow Jones: -2.48%
- Nasdaq Composite: -2.55%
- US Dollar Index: -1% (3-year low)
- 10-Year Treasury Yield: +5 bps to 4.39%
“The dollar, the bond market, and equity markets are taking it on the chin, some of which was undoubtedly exacerbated by the comments directed at Chairman Powell,” said Troy Gayeski, chief market strategist at FS Investments.
🏦 Analysts Warn of Dangerous Precedents
Experts fear that removing Powell would threaten the credibility of the Fed and raise global concerns about the U.S. economic governance.
“It would further put downward pressure on the confidence that foreign investors have in investing in U.S. dollar assets,” said Michael Goosay, CIO of global fixed income at Principal Asset Management.
Neil Dutta, head of economics at Renaissance Macro, added:
“Risk premiums would rise sharply as investors question the central bank’s independence and longer run interest rates would surge.”
This increase in uncertainty around interest rate policy—often a key driver of equity valuations—adds another layer of risk for investors navigating a volatile 2025.
🌐 From ‘New World Order’ to ‘New World Disorder’?
Adding to investor discomfort are Trump’s unpredictable tariff policies, which have already shaken global trade relationships and wiped over $1.5 trillion from U.S. equities in recent sessions.
“Trump’s Tariff Turmoil has put the world on edge,” wrote Ed Yardeni, president of Yardeni Research.
“A new world order may be the ultimate result, but for now we’ve got the New World Disorder, leaving everyone scrambling to adjust to Trump’s unpredictable policy pivots.”
