If you’re watching the US stock market closely, you’ve probably noticed a bit of turbulence lately, and no, it’s not just your portfolio acting up.
On Monday, April 21, 2025, the markets dipped sharply, with the Dow dropping 2.5%, Nasdaq losing over 2.5%, and the S&P 500 slipping 2.4%.
The culprit? A fresh wave of online jabs from former president Donald Trump aimed directly at Federal Reserve Chair Jerome Powell.
Trump Called Powell “Mr. Too Late, a major loser.”
In a post that lit up social media and sent financial commentators into a frenzy, Trump called Powell “Mr. Too Late, a major loser” for not cutting interest rates.
According to Trump, Powell’s refusal to slash rates is “slowing the economy” and making the effects of Trump’s new tariffs even worse.
Why the push for lower interest rates? Trump’s recent “liberation day” tariffs sparked inflation fears, and now he wants the Fed to counter those fears by cutting rates, which would typically stimulate the economy.
But the Fed, led by Powell, is not biting.
Instead, Powell has made it clear: the Fed isn’t interested in playing politics.
Here’s the Trifecta of Market Anxieties
Investors aren’t just reacting to Trump’s tariffs or inflation worries. They’re also nervous about Trump’s increasingly aggressive stance against the Federal Reserve’s independence.
Tariffs are inflationary. Tariffs raise prices. More inflation could force the Fed to raise rates, not cut them.
The Fed is also resisting rate cuts. Powell has warned the new tariffs could create a “challenging scenario,” but he’s not ready to act just yet.
Nevertheless, there’s uncertainty over the Fed’s future. Trump is floating the idea of firing Powell, a move that would be unprecedented and likely send markets into freefall.
Add all of that together, and you’ve got a recipe for a Wall Street selloff.
Can Trump Actually Fire Powell?
Here’s where it gets legally murky. The Federal Reserve is supposed to be independent, and Powell’s term doesn’t end until May 2026.
The Supreme Court is currently reviewing a case that could impact Trump’s ability to fire federal officials, but it’s unclear whether that would apply to the Fed chair.
Still, the Trump administration is exploring its options. Economic adviser Kevin Hassett recently said they’ll “continue to study” the legal path to potentially removing Powell.
Meanwhile, Powell remains calm and collected (as always), reiterating that the Fed’s independence is protected by law.
If You’re Invested in U.S. Markets
This clash between Trump and Powell isn’t ending soon. Any new tariff talk, rate hike rumors, or legal power plays will likely shake the markets again
The next Fed meeting is set for May 6–7, 2025. Investors will be glued to Powell’s words. Will the Fed signal a rate cut? Will they double down on independence?
