Dollar sinks to three-year low as Trump calls US central bank chief "major loser"

Global financial markets are reeling as the US dollar plummets to a three-year low and gold prices soar to an unprecedented USD 3,500 per ounce.

The turmoil follows President Donald Trump's intensified public criticism of Federal Reserve Chair Jerome Powell, whom he labeled a "major loser" for not lowering interest rates.​

Escalating tensions shake investor confidence

In a series of posts on his Truth Social platform, President Trump demanded immediate rate cuts, warning of a potential economic slowdown. He accused Powell of being consistently "too late" in responding to economic developments and suggested that Powell's termination "cannot come fast enough".

These remarks have heightened concerns over the Federal Reserve's independence, a cornerstone of US economic policy. Investors fear that political interference could undermine the central bank's ability to manage inflation and employment effectively.​

Market turmoil reflects growing uncertainty

The president's comments have triggered a broad sell-off in US financial markets. The S&P 500 fell 2.4 percent, the Dow Jones Industrial Average dropped 2.5 percent, and the Nasdaq Composite declined 2.6 percent on Monday. The dollar index, which measures the greenback against a basket of major currencies, fell to its lowest level since 2022 .​

Gold, traditionally seen as a safe-haven asset during times of uncertainty, surged to a record high of USD 3,500 per ounce. Analysts attribute the rally to investor concerns over the Fed's independence and the potential for increased inflation due to political pressures.

Global implications, responses

The market volatility has not been confined to the United States. European stock markets opened lower on Tuesday, with Germany's DAX and France's CAC 40 both down around 0.5 percent. The British pound reached a seven-month high against the dollar, reflecting the greenback's weakness.

International leaders and economists have expressed concern over the potential erosion of the dollar's status as the world's reserve currency. The situation has prompted discussions among central bankers and finance ministers at the International Monetary Fund's spring meetings in Washington, D.C., where calls for maintaining central bank independence have intensified.​

Looking ahead

The Federal Reserve is scheduled to hold its next policy meeting in May. While Powell has emphasized the importance of data-driven decisions, the mounting political pressure adds a layer of complexity to the central bank's deliberations.​

As markets continue to navigate the fallout from the president's remarks, investors are closely monitoring developments for signs of stability or further disruption in the global financial landscape.