Is Trump’s Fed Targeting the Dollar’s Downfall?

In a surprising twist in U.S. economic policy, President Donald Trump’s public criticism of the Federal Reserve and its Chairman Jerome Powell has incited market chaos and raised grave concerns over the independence of the country's monetary policy. As speculations swirl regarding whether Trump might take steps to dismiss Powell, the U.S. dollar has suffered its steepest decline in nearly a year.

Updated on April 20, 2025, the dollar fell to its lowest levels since January 2024, prompting widespread selling among investors. Market reaction intensified after Kevin Hassett, Director of the National Economic Council, revealed that Trump was contemplating action against Powell, a development that rattled financial markets globally.

As the administration’s rhetoric escalates, stocks and other assets linked to the dollar are experiencing significant pressure. President Trump’s recent remarks about the Fed have led to fears that a potential shake-up at the central bank could undermine both investor confidence and the dollar’s strength. Charu Chanana, chief investment strategist at Saxo in Singapore, noted, "Any signs of political pressure on monetary policy could undermine the Fed’s independence and complicate the path ahead for interest rates, just as investors are looking for stability amid global volatility."

Moreover, Trump's tariffs against international trade have increased market uncertainty, fostering a pervasive sense of anxiety among investors. With American assets and markets under siege, the dollar has depreciated against every major currency, with the euro and Japanese yen hitting multi-year highs.

Gold, which traditionally serves as a safe haven during economic turmoil, surged dramatically, reaching an unprecedented price of $3,370.17 per ounce—an increase of 26% this year alone. Investors are flocking to this precious metal, reflecting their unease with a perceived decline in U.S. economic security.

As these developments unfold, major companies are bracing themselves for the impact of looming trade battles, particularly with China. While Trump has hinted at constructive conversations with Chinese officials, the rhetoric surrounding tariffs and trade policies remains tumultuous. The ongoing war of words raises the question: can the U.S. economy recover its footing amid the relentless waves of political and economic pressure?

The earnings season further complicates the financial landscape, with anticipation mounting over reports from technology giants such as Alphabet and Tesla—both of which have seen their stock prices plunge sharply this year. Analysts warn that shifting trade policies and potential political instability may exacerbate the challenges faced by these major players.

In summary, President Trump's threats against Fed leadership are more than just political maneuvering; they symbolize a significant turning point in U.S. economic policy that could have lasting implications for the dollar, global markets, and investor confidence. As the nation navigates these turbulent waters, the question that lingers is: how will this affect the future trajectory of the economy? Share your thoughts and insights in the comments below!

• Donald Trump
• Federal Reserve
• Jerome Powell

Related issues news

Why is the US dollar falling?

'The dollar is losing value because the Federal Reserve is lowering interest rates and therefore imports will be more expensive,' said financial adviser David Gustin, of Jericho-based DMG Portfolio Management, who explained that lower interest rates make the dollar less valuable to foreign investors.

What does the weak dollar mean for the global economy?

A weak dollar makes the profits that foreign companies earn from their U.S. divisions worth less when translated back into euros or yen. It also makes the goods they produce more expensive for American consumers.

What does a weak dollar mean?

A weaker U.S. dollar buys less foreign currency than it did previously. This makes goods and services (and assets) produced in foreign countries relatively more expensive for U.S. consumers, which means that U.S. producers that compete with imports will likely sell more goods (such as American cars) to U.S. consumers.