US stocks, dollar slide; Trump's attacks on Fed chair fuel anxiety
Mon April 21, 2025 5:27 PM
At least today’s fiasco did not lead to another round of 4-digit losses, though it came close. And though Trump began his attacks against Fed Chair Powell last week, today Trump doubled down quite a bit more than usual by suggesting that he could replace Powell (which he cannot) and that lower interest rates were critical for saving the economy. This double whammy sent the markets tumbling and increased fear and uncertainty substantially with these real threats to the future independence of the Fed, which has always been the stabilizing rod for the economy, may be in question.
This sent everyone rushing to safe haven assets with gold reaching an intra-day record high and Treasuries gaining, the 10-year note rising a big 8.8 basis points in one day. Conversely, the S&P has now fallen 16% below its February high, just 4% above bear market level. The VIX now stands at 33.8 (up 14%) and, per the CBOE, volume came in at 14 billion, still well below the 19 billion average as we come out of a holiday weekend and spring break week.
Editor’s Note: Does Trump not understand that Powell is but one of seven governors, each of them voting independently. Policy is not determined by Powell but by a consensus of all seven so dethroning the chair will not change that and such a dethroning, assuming it’s even possible, would only send the markets into much deeper turmoil. Does he also not understand that our current economic woes are the result of inflation, not Fed policy which has brought it down, and that prices will only continue to rise higher if rates are cut prematurely.
DJ: 39,142.23 -527.16 NAS: 16,286.45
-20.71 S&P: 5,282.70
+7.00 4/17
DJ: 38,170.41 -971.82 NAS: 15,870.90 -415.55 S&P: 5,158.20 -124.50 4/21
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