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5d ago

Trump’s Criticism of Fed Chair Powell Shakes Markets and Downgrades Global Growth Outlook

President Trump’s attacks on Federal Reserve Chair Jerome Powell, combined with aggressive tariff policies, have led to market turmoil and prompted the IMF to lower 2025 growth projections for the US and global economy.

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Overview

  • The Dow Jones, S&P 500, and Nasdaq fell by approximately 2.5%, while the US dollar hit a three-year low and gold reached a record high, reflecting investor unease over Trump’s criticisms of Powell.
  • Trump called Powell a 'major loser' and 'Mr. Too Late,' pressuring him to lower interest rates despite Powell’s warnings about inflation risks tied to the administration’s tariffs.
  • The IMF reduced its 2025 global growth forecast by 0.5 percentage points to 2.8%, citing the economic impact of US tariffs and retaliatory trade measures.
  • US growth projections for 2025 were slashed to 1.8%, a drop of 0.9 percentage points, with Germany expected to see zero growth due to disrupted supply chains and trade tensions.
  • Trump’s potential move to dismiss Powell raises concerns about the independence of the Federal Reserve, with legal and institutional challenges looming over the central bank’s autonomy.