President pressures Federal Reserve to cut rates amid tariff fallout, calling Powell a “major loser”
U.S. stock markets fell sharply on Monday as former President Donald Trump intensified his public attacks on Federal Reserve Chair Jerome Powell, urging immediate interest rate cuts to counter the economic impact of his own tariff policies.
In a fiery social media post, Trump labeled Powell “a major loser” and demanded the central bank lower rates immediately.
“There can be a slowing of the economy unless Mr. Too Late, a major loser, lowers interest rates, NOW,” Trump posted.
Trump has repeatedly pressed Powell to reduce interest rates in recent days, hoping to offset the inflationary pressure created by his latest round of tariffs. However, investors appear unnerved by Trump’s confrontational stance and the resulting policy uncertainty.
Market Reaction: Stocks and Dollar Slide
On Monday morning:
- The Dow Jones Industrial Average fell by over 1,000 points (2.8%)
- The Nasdaq Composite dropped more than 3%
- The S&P 500 slid 2.9%
High-profile tech stocks suffered steep losses, with Tesla and Nvidia both falling over 5%. Meanwhile, the U.S. dollar weakened to multi-year lows against most major global currencies.
Markets had temporarily rebounded after Trump delayed the implementation of his “reciprocal tariffs,” but those gains have now evaporated amid the renewed pressure campaign on Powell.
Powell Holds Firm Amid Political Pressure
Jerome Powell, known for his cautious and measured public statements, has voiced concern over the economic risks posed by Trump’s tariffs. In remarks to reporters last month, Powell warned the levies could create a “challenging scenario” for the Fed, signaling no imminent rate cuts.
“Tariffs are highly likely to generate at least a temporary rise in inflation,” Powell said. “The inflation effects could also be more persistent.”
The Fed has gradually brought down U.S. inflation from a 9% peak in June 2022 to 2.4% last month — a notable achievement given rising global prices and supply chain pressures. The central bank continues to balance its dual mandate: controlling inflation while maximizing employment, with jobless rates currently around 4%.
Trump Threatens Powell’s Position
Further rattling markets, Trump has floated the idea of firing Powell — an unprecedented move for a sitting or former president, and one that experts warn would trigger severe market turmoil.
“Powell’s termination cannot come fast enough!” Trump wrote online last week.
While it remains unclear whether Trump has the authority to dismiss the Fed chair before the end of his term in May 2026, the Supreme Court is currently weighing a case that could expand presidential power to remove federal officials. The implications for the Federal Reserve’s independence are significant.
White House economic adviser Kevin Hassett confirmed on Friday that the administration is “continuing to study” legal avenues for potentially removing Powell.
Fed’s Next Move
The Federal Reserve’s next policy meeting is scheduled for May 6-7, where officials will review interest rates and economic conditions. Powell recently reaffirmed the importance of the central bank’s independence.
“Our independence is a matter of law,” Powell said last week. “We serve very long terms, seemingly endless terms, so we’re protected by the law.”
Looking Ahead
As Trump’s tariff policies roil markets and his feud with the Fed chair intensifies, investors remain on edge. Experts warn that any attempt to undermine the Federal Reserve’s autonomy could destabilize financial markets and further erode confidence in U.S. economic leadership.
