US stock markets faced another decline as Donald Trump criticized Federal Reserve Chair Jerome Powell, urging him to lower interest rates to combat inflation caused by new tariffs. Trump labeled Powell a "major loser" for not taking action, further pressuring the Fed as market reactions turned negative. The Dow dropped by 1,000 points, while major tech stocks also suffered. Despite stock market recoveries following a temporary pause in tariffs, losses resurfaced as Powell indicated that rate cuts were not imminent, warning of inflationary impacts from tariffs.
In recent days, Trump has amped up attacks against the Fed chair, pushing Powell to lower interest rates to offset the inflationary impacts of the new tariffs.
Stock markets had recovered the losses they endured after Trump rolled out his liberation day tariffs proposals, which would have imposed huge levies on all of the US's trading partners.
In recent weeks, Powell has spoken out about Trump's tariffs and warned that they may lead to a challenging scenario for the Fed.
US inflation peaked at 9% in June 2022 but has slowly come down over the last few years, largely due to the Fed's careful adjustment.
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