Trump Talks, Markets Quake: Aftershocks Reach the Fed

The market is still finding ways to recover from the aftermath of ‘reciprocal tariffs’ and regaining some hope with the so-called strategic 90-day pause on Liberation Day tariffs. Amid all this, Trump’s fresh jibe at the Federal Reserve Chair, Jerome Powell, brings back the black clouds over the stock market!

“Mr. Too Late, a major loser,” words Trump wrote in a Truth Social post for Powell. The Fed declines to cut interest rates, and Trump responds as the prospect of a slowing economy becomes more evident. It doesn’t come as a surprise, since Trump has been pushing the Fed to lower rates, likely to please the stock market, which took a hit after the recently announced tariffs. Powell, unlike Trump, has been cautious with his words and has remarked on the challenging scenario caused by Trump’s tariffs, including the risk of persistent inflation. However, he didn’t show any indication or intention to lower the rates anytime soon.

Should or shouldn’t Trump’s post have seen the light of day? That’s for the political critics to judge, but the stock market has spoken. Unfortunately, the bear seems to be on the loose, and in this fight, the bull might just lose!’

Here’s What’s Happened So Far!

The Dow Jones Industrial Average fell by more than 971 points, representing a 2.48% decline, while the S&P 500 and Nasdaq Composite lost 2.36% and 2.55%, respectively. Tech shares bore the worst of the impact, as Tesla fell 7%, Nvidia fell 6%, and Amazon, AMD, and Meta all fell about 4%.

The dollar plunged to its lowest point since 2022. Bitcoin also spiked, finally stabilizing over $87,000.

The conflict between Trump and the central bank chief is far from being resolved. There is a possibility that Trump may try to fire Powell due to the tussle over interest rates. Does Trump actually have the authority to do so? That’s a different story!

Read More: Bitcoin Price Prediction

USA vs China – The Trade War Intensifies

The trade tensions are quite obvious. Following Washington’s decision to increase tariffs to 145% on Chinese imports and Beijing’s response with a 125% tariff on US goods, the trade war may be going global. Reports are that the US is planning to pressure foreign governments to cut trade with China in exchange for relief from American tariffs. Japan has reportedly already reached out to Washington, and South Korea is to follow. If more governments start imposing increasing tariffs on Chinese goods, it will undoubtedly be a great concern. The world trade and economy will take a massive hit.

Expectedly, China has no intention of bowing down and has issued a warning to other countries not to join larger economic deals with the US at China’s expense. This further escalated the tensions in the trade war between the world’s two biggest economies. With Trump’s aggressive tariff war and the central bank giving no hints at rate cuts, the market turmoil can be expected to continue. As the stock market takes direct hits, investors will certainly be on high alert.