Global financial markets faced fresh turbulence on Tuesday as the US dollar weakened, bullion surged to a new record, and stocks fluctuated sharply following renewed attacks by President Donald Trump on Federal Reserve Chairman Jerome Powell.
Investors were spooked after Trump escalated his public criticism of Powell, branding him a “major loser” and “Mr Too Late” in a post on his Truth Social platform. The US President also demanded pre-emptive interest rate cuts, stoking fears that he may be preparing to fire the Fed boss — a move that could spark a crisis of confidence in US monetary independence.
The fallout from Trump’s remarks was immediate. Wall Street’s main indexes plunged roughly 2.5 percent on Monday, marking one of the steepest single-day declines in months. The Dow Jones Industrial Average closed at 38,170.41, while safe-haven gold soared above $3,500 per ounce, setting a new all-time high.
“The first volley on Thursday had little market reaction, but Monday’s second barrage has seen an intensification of the ‘sell America’ trade,” said Tapas Strickland of National Australia Bank. “This underscores the very real policy risk for investors and signals a potential shift in the global financial system.”
Trump’s aggressive rhetoric followed Powell’s recent warning that continued tariff hikes could reignite inflation, a statement that evidently irked the president. Trump responded by insisting there is “virtually no inflation,” citing falling energy and food costs and the European Central Bank’s recent rate cuts as evidence for looser monetary policy.
The pressure on Powell raises legal and constitutional questions about the Federal Reserve’s independence. Although it is unclear whether Trump has the authority to remove Powell, his top economic adviser Kevin Hassett admitted the president is exploring his options.
Analysts warned that any attempt to oust Powell would ignite extreme market volatility. “If Powell were to be fired, we could see the most dramatic rush to the exit from US assets imaginable,” said Pepperstone strategist Michael Brown. “It could upend the entire structure of the global financial system.”
Elsewhere, global markets posted mixed results on Tuesday, with Asian stocks swinging between gains and losses. Tokyo’s Nikkei 225 dropped 0.2 percent to 34,220.60, while the Hang Seng Index in Hong Kong climbed 0.6 percent to 21,527.95. London’s FTSE 100 remained flat, and Paris and Frankfurt edged down slightly.
On the forex market, the dollar remained under pressure. It slipped to 140.38 yen from 140.89 yen, and the euro eased to $1.1500. Oil prices, however, rose modestly, with West Texas Intermediate up 1.1 percent to $63.78 per barrel and Brent crude rising 1.0 percent to $66.95.
With investor nerves fraying and economic uncertainty mounting, all eyes remain on Washington as markets brace for what could be another pivotal week in global finance.
