US stocks plummeted on Monday as President Donald Trump intensified his attacks on Federal Reserve Chairman Jerome Powell. Trump called Powell a “major loser” and urged him to lower interest rates “pre-emptively” to boost the economy.
The Dow Jones Industrial Average fell 2.5% and has dropped about 10% this year, while the Nasdaq dropped more than 2.5%. The S&P 500 also declined 2.4%, losing nearly 12% of its value since January.
Despite the turmoil in the stock market, investors were drawn to safe assets like government bonds and the dollar, which still held up relatively well. However, interest rates on US debt rose as investors demanded higher returns for holding Treasuries.
Trump’s criticism of Powell is not new, but it has added to the market uncertainty. The president had previously discussed firing Powell and has urged him to lower borrowing costs since taking office. Last week, Trump wrote that Powell’s termination “cannot come fast enough.” Officials are now studying the option of removing Powell, despite its controversy and potential legal implications.
The Fed chairman warned earlier that Trump’s import taxes would drive up prices and slow the economy. This latest criticism from Trump has contributed to the market volatility, which has raised fears of an economic recession.
Source: https://www.bbc.com/news/articles/ce92y3j9v34o