Wall Street Plummets as Trump Criticizes Fed Chair Powell, Dollar Hits 3-Year Low

By Joseph, Contributor
April 21, 2025 – 3:30 PM CST, Milwaukee, WI

The U.S. stock market took a nosedive today, with major indices recording their steepest single-day losses of the year, as President Donald Trump escalated his public feud with Federal Reserve Chair Jerome Powell.

​Investors, already jittery over Trump’s aggressive tariff proposals, reacted swiftly to his latest remarks, which hinted at potential interference with the Fed’s independence. The Dow Jones Industrial Average plummeted 1,200 points, a 3.8% drop, while the S&P 500 and Nasdaq fell 4.1% and 4.5%, respectively.

Trump’s comments came during a morning interview on Fox News, where he accused Powell of “mismanaging” the economy and suggested he might seek ways to influence monetary policy directly. “Powell’s not doing what’s best for America,” Trump declared, fueling speculation about unprecedented executive overreach. The remarks sent shockwaves through financial markets, as traders feared a destabilization of the Fed’s long-standing autonomy.

The U.S. dollar, already under pressure from Trump’s tariff plans, hit a three-year low against a basket of major currencies. The dollar index dropped 2.3% to 92.4, its weakest level since April 2022. Analysts attributed the decline to concerns that tariffs would exacerbate inflation, forcing the Fed to maintain high interest rates longer than anticipated, thus weakening the dollar’s appeal.

Gold, on the other hand, soared to a record high of $2,750 per ounce, as investors sought safe-haven assets amid the uncertainty. “Gold is the clear winner today,” said Sarah Langley, a commodities analyst at Goldman Sachs. “The combination of a weaker dollar and geopolitical rhetoric is driving demand for bullion.” Silver and other precious metals also saw significant gains.

The market turmoil was compounded by fears over Trump’s proposed 25% tariffs on imports from China and other trading partners. Economists warned that such measures could disrupt global supply chains, increase consumer prices, and slow economic growth. The retail and technology sectors were hit hardest, with companies like Apple and Walmart losing 5.2% and 4.8% of their share value, respectively.

Investors are now grappling with the prospect of a prolonged period of volatility. “Trump’s rhetoric is creating a perfect storm,” said Michael Carter, chief investment officer at Pinnacle Wealth Management. “You’ve got tariffs, Fed uncertainty, and a dollar in freefall. It’s a recipe for panic.” Carter noted that many institutional investors are shifting toward defensive assets like bonds and gold.
The White House attempted to downplay the market reaction, with Press Secretary Emily Rogers stating, “The President is focused on making America’s economy stronger, and his policies will deliver long-term growth.” However, her comments did little to assuage investors, who continued to sell off equities throughout the day.
The Federal Reserve issued a brief statement reaffirming its commitment to its dual mandate of price stability and maximum employment. “We operate independently to serve the American people,” the statement read, without directly addressing Trump’s remarks. Fed watchers expect Powell to face intense scrutiny at his next press conference, scheduled for early May.
On Capitol Hill, reactions were mixed. Some Republican lawmakers, like Senator Tom Reed of New York, expressed cautious support for Trump’s economic agenda but urged restraint on Fed criticism. “The Fed needs to do its job, and we need to focus on growth,” Reed said. Democrats, meanwhile, condemned Trump’s comments as reckless. Senate Minority Leader Elizabeth Warren called them “a dangerous attack on our economic institutions.”
The international response was equally pointed. China’s Ministry of Commerce warned that new tariffs would “harm both economies” and promised retaliatory measures. European Central Bank President Christine Lagarde emphasized the need for “global cooperation” to stabilize markets, subtly criticizing Trump’s unilateral approach.

Market analysts are now bracing for a tense week ahead. The VIX, a measure of market volatility, spiked to its highest level since the 2022 midterms. “We’re in uncharted territory,” said Rachel Nguyen, a senior economist at JPMorgan Chase. “The markets are pricing in a lot of uncertainty, and it’s unclear how far this will go.”

The sell-off wasn’t limited to U.S. markets. European indices, including the FTSE 100 and DAX, fell 2.5% and 3%, respectively, as fears of a global trade war loomed. Asian markets, which were closed for the day, are expected to open lower tomorrow, with futures pointing to a sharp decline in Japan’s Nikkei.

Ordinary Americans are starting to feel the ripple effects. Retirement accounts tied to stock indices took a hit, and some consumers expressed concern about rising prices due to tariffs. “I’m worried about what this means for my 401(k),” said Mark Thompson, a 52-year-old teacher in Ohio. “Everything seems so uncertain right now.”

The day’s events have also reignited debates about the Fed’s role in the economy. Some economists argue that Trump’s criticism reflects broader frustrations with high interest rates, which have strained small businesses and homebuyers. Others warn that undermining the Fed’s independence could lead to long-term economic instability.

As the closing bell rang on Wall Street, the mood was somber. Traders described the session as “chaotic,” with high trading volumes reflecting widespread panic. “This is one of those days you don’t forget,” said veteran trader John Esposito. “The question is whether tomorrow brings more of the same.”

​Looking ahead, investors are closely watching Trump’s next moves. Any further escalation in his rhetoric or policy announcements could deepen the market rout. For now, Wall Street is holding its breath, hoping for a return to stability in an increasingly turbulent economic landscape.
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