Gold soared to another all-time high on Tuesday, while U.S. equities tumbled and the dollar wobbled—signs of growing investor anxiety over both economic policy and political pressure in Washington as President Donald Trump’s intensifies attacks on Federal Reserve Chairman Jerome Powell.
The latest market jitters were sparked by Trump’s increasingly aggressive rhetoric aimed at Powell, which has raised fresh concerns about the central bank’s independence.
After already criticizing Powell last week over comments warning that U.S. tariffs could fuel inflation, Trump doubled down on Monday, calling the Fed chief a “major loser” and suggesting that his removal might be imminent.
“I’m not happy with him. I let him know it,” Trump said on Truth Social. “If I want him out, he’ll be out of there real fast, believe me.” He also accused Powell of being “Mr. Too Late” for allegedly lagging in cutting interest rates, despite what Trump described as “virtually no inflation” in the economy.
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Wall Street endured a sharp selloff Monday, with the Dow, S&P 500, and Nasdaq all closing down by roughly 2.5%. The dramatic drop came after Trump’s comments stoked fears of a direct challenge to the Federal Reserve’s independence—a cornerstone of investor confidence in the U.S. economy.
“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.
Investors fled to safe havens, pushing gold past $3,457 per ounce—a fresh record. The dollar, which had already taken a hit, stabilized slightly but remains under pressure against major global currencies.
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Global equity markets offered little relief. Stocks across Asia swung wildly, with losses in Hong Kong, Sydney, Taipei, Jakarta, Wellington, and Manila, while Shanghai, Singapore, and Seoul managed modest gains on the first full trading day after the Easter break.
Behind the market turbulence is growing speculation that Trump is seriously considering removing Powell from his post. Though legal and constitutional questions surround such a move, Trump’s top economic adviser, Kevin Hassett, confirmed Friday that the former president was exploring whether it’s possible.
Such a move, analysts warn, could be catastrophic.
“Were Powell to be fired, the initial reaction would be a huge injection of volatility into financial markets, and the most dramatic rush to the exit from US assets that it is possible to imagine,” said Michael Brown, a strategist at Pepperstone. “Lower, much lower, equities; Treasuries sold across the board; and the dollar falling off a cliff.”
Brown added that tampering with the Fed’s independence could undermine global trust in the U.S. financial system, potentially destabilizing international markets.
With inflation fears, tariff tensions, and now political threats to monetary policy all colliding, investors are bracing for what could be an unpredictable and volatile period ahead. One thing is clear—confidence in U.S. economic leadership is wavering, and markets are reacting accordingly.
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