US President Donald Trump has escalated his criticism of Federal Reserve Chairman Jerome Powell, sparking concerns among investors about market volatility. Despite denying plans to fire Powell, Trump’s public attacks on the central bank chief are damaging to financial markets and the US political system.
Experts say that Trump’s rhetoric is creating uncertainty among investors, with many fearing a strong reaction from the market if Trump were to push through his demands. While some analysts believe that Trump will eventually cave under pressure, others warn of the dangers of his relentless pursuit of his agenda.
The Fed has managed several crises on Powell’s watch, including the pandemic emergency response and bank failures in 2023. Analysts praise Powell for his leadership and discipline, but acknowledge that investors are concerned about an independent Fed.
Trump nominated Powell to helm the Fed in his first term, but has frequently criticized him since then. The president believes that public displays of pressure on the central bank give him strength, but experts warn that this approach is damaging to financial markets.
A Supreme Court ruling in May signaled that Trump may not have the legal authority to fire Powell, and many analysts agree. However, investors remain cautious, waiting for signs that Trump will back down from his demands. The tension between Trump’s relentless pursuit of his agenda and the market’s expectation of him to cave under pressure has led some to warn of a “fabric of the universe” snapping.
Source: https://eu.usatoday.com/story/money/2025/07/16/trump-fed-chair-jerome-powell-investors-react/85243528007