Investors 'abandon' US assets - Trump attacks Powell and calls for rate cuts!
US President Donald Trump intensified pressure on Federal Reserve Chairman Jerome Powell to cut interest rates on Monday, calling him "a big loser" and warning of an economic slowdown.
“There can be almost no inflation, but there can be a slowdown in the economy unless Mr. Too Late, a big loser, lowers interest rates, NOW, ” he posted on Truth Social. Trump also compared the Federal Reserve to the European Central Bank (ECB), which has lowered interest rates seven times. “Powell has always been ‘Too Late,’ except during the election season when he lowered rates to help the sleepy Joe Biden, later Kamala, get elected. How did that work? ” he added.
The comments raised concerns about the independence of the Federal Reserve, triggering further sell-offs in US assets, including stocks, the dollar and government bonds.
U.S. stock markets extended losses after the Easter holiday break, with the Dow Jones, S&P 500 and Nasdaq Composite all down more than 2% on Monday. Wall Street has seen a sharp sell-off since Trump announced retaliatory tariffs in early April, followed by a historic rally after he decided to suspend tariffs on all countries except China a week later. However, Trump's attack on Powell now raises fresh concerns about the Fed's independence and could threaten the broader stability of the global financial system.
“If Powell were to be fired, the initial reaction would be a massive injection of volatility into financial markets and the most dramatic rush to exit U.S. assets imaginable,” wrote Michael Brown, senior research strategist at Pepperstone in London. “ If that were to happen, then the dollar’s reserve status and the Treasury’s haven value would be erased, perhaps forever, in both cases.”
The US dollar weakened sharply against major currencies, with the dollar index falling to just above 98, its lowest level since March 2022. The euro rose against the greenback, surpassing 1.05 to reach its highest level since November 2021. The Swiss franc also strengthened to levels not seen since 2015, when the National Bank devalued its Swiss franc.
U.S. government bonds saw sharp declines as yields rose, especially on long-term Treasuries. The 10-year and 30-year Treasury yields rose by 8 and 10 basis points, reaching 4.4% and 4.9%, respectively.
Gold prices rose, repeatedly hitting new all-time highs amid concerns that the U.S. dollar is losing its status as the global reserve currency. Risk sentiment and inflation fears also lifted precious metals prices. COMEX gold futures rose 1.6% to $3,480 an ounce by 4:00 a.m. CEST, following a 2.9% gain on Monday.
Last week, Federal Reserve Chairman Jerome Powell acknowledged that the central bank is facing a growing dilemma in fulfilling its dual mandate of price stability and maximum employment. U.S. Federal Reserve (Fed) Chairman Jerome Powell warned last week that escalating rates could fuel inflation while undermining growth.
He acknowledged that the central bank is facing a growing dilemma in fulfilling its dual mandate of price stability and maximum employment. Powell signaled that there is no rush to cut interest rates further: " At this time, we are well positioned to wait for greater clarity before considering any adjustments to our policy stance."
After the speech, Trump took aim at Powell, calling for rate cuts, adding that “his end can’t come soon enough.” National Economic Council Director Kevin Hassett also indicated that the Trump administration was studying whether to fire Powell.
The Fed chairman is an independent role, although appointed by the US president. Powell previously noted that presidents cannot legally remove or demote the Fed chairman. His four-year term ends on May 15, 2026. Under the Supreme Court ruling, members of the Fed board can only be removed before their terms expire “for cause.”
Poll
Albanians drive around with old cars! - In 2024, they will pay 65 million euros in taxes on used vehicles
Albanian citizens prefer to buy and use a used vehicle rather than a new one. This is also confirmed by the fact that the businesses selling cars imported......
Bird flu continues to drive up egg prices in the EU - Which member state is paying the most?
Following the impact of bird flu on the U.S. egg industry, the global price of eggs has become a focal point for consumers, especially online. The average......
KESH, 50 MWp solar plant in Belsh - 30 million euro loan approved by EBRD, total cost is 40 million euro
The Albanian Power Corporation aims to diversify energy production sources through the construction of a 50 MWp solar power plant in the Belsh area, while it......
Dollar in 'free fall' – Euro and British Pound recover!
The US dollar has continued to decline this morning compared to yesterday, being bought today at 85.4 lek and being sold at 86.9 lek according to the local......
Plan for 42 electrical substations - Investments, OSHEE: Improvement of electrical systems in Tirana and Durrës
The Electricity Distribution Operator and the German Development Bank (KfW) have signed a financing agreement for the implementation of the “Electricity......
206 million euros for earthquake damages - How much can insurance companies pay? AMF: Reinsurance increased by 4% in 2024
In the past year, gross written premiums that were transferred for reinsurance reached 3.71 billion lek. This value has increased by almost 4% compared to......
"May 11 is the true day of every Albanian" - Berisha, from Puka: In Albania there will be no pension below 200 euros
The Chairman of the Democratic Party, Sali Berisha, declared from Puka that May 11 is a day for a decisive turning point for Albanians to place their dreams......
EU employment hits record levels - Europe registers highest figures since 2005
The employment rate in the EU reached its highest level ever recorded in the fourth quarter of 2024, according to new data from the OECD (Organization for......
