US stocks and the dollar dropped once again after Donald Trump increased his criticism of Federal Reserve Chair Jerome Powell. The US President described Powell as “a major loser” for refusing to cut interest rates.

In a social media post, Trump urged the Fed to act quickly. He said Powell should lower rates “pre-emptively” to support the economy. Trump claimed Powell had responded too slowly to economic signals. He warned that “there can be a SLOWING of the economy unless Mr. Too Late, a major loser, lowers interest rates, NOW.”

Trump's Criticism Adds to Market Worries

Meanwhile, Trump’s own tariff plans have already triggered a market sell-off. His trade measures have increased fears of a possible recession. At the same time, his renewed attacks on Powell have made investors even more uneasy.

Trump, who appointed Powell during his first term, has now turned against him. His growing frustration with Powell has fueled more uncertainty in the markets.

Major Indexes Tumble

On Monday, major US stock indexes suffered sharp losses. The S&P 500 fell around 2.4%, and it has now dropped about 12% since the beginning of the year. Similarly, the Dow Jones Industrial Average slid 2.5%, bringing its total loss for the year to roughly 10%.

Additionally, the tech-heavy Nasdaq declined more than 2.5% on the same day. Since January, it has fallen approximately 18%.

Safe-Haven Assets Also Struggle

Even traditional safe-haven assets did not escape the turmoil. Although investors usually rely on the US dollar and government bonds during tough times, both came under pressure.

On Monday, the dollar index—which measures the dollar against other major currencies like the Euro—hit its lowest level since 2022. At the same time, interest rates on US government debt increased. Investors demanded higher yields in exchange for holding Treasury bonds.

Gold Hits New Peak

In contrast, gold prices soared. Spot gold crossed $3,400 (£2,563) per ounce for the first time on Monday. Many investors viewed gold as a safer alternative during this period of economic instability.

Longstanding Feud with Powell Resurfaces

Trump’s criticism of Powell is nothing new. During his presidency, he reportedly considered firing Powell. Since his recent election win, Trump has again called for lower interest rates.

Recently, Powell warned that Trump’s import taxes could raise costs and slow growth. In response, Trump stepped up his attacks. On Thursday, he wrote, “Powell’s termination cannot come fast enough.”

Legal Questions Remain Over Firing Powell

However, removing the Fed chair would be highly controversial. It would also raise legal questions, given the Federal Reserve’s tradition of independence.

In fact, Powell told reporters last year that he didn’t believe the president had the authority to fire him. Despite this, one of Trump’s top economic advisers confirmed on Friday—when US markets were closed—that officials were examining that possibility.