Dollar plummets to three-year lows
The US dollar fell to a three-year low on Monday amid rising concerns tied to President Donald Trump’s tariff strategy and his mounting conflict with Federal Reserve Chairman Jerome Powell. The ICE US dollar index, which measures the greenback...
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The US dollar fell to a three-year low on Monday amid rising concerns tied to President Donald Trump’s tariff strategy and his mounting conflict with Federal Reserve Chairman Jerome Powell.
The ICE US dollar index, which measures the greenback against a collection of major currencies, dropped over 1% to 97.923, marking its lowest point since March 2022. The dollar also reached new lows against the euro, pound, yen, and Swiss franc, and weakened against the ruble, dipping below 80 for the first time since June 2024.
The currency has faced increased pressure since Trump introduced what he called "Liberation Day" tariffs on April 2, targeting various global trade partners. Market sentiment was further unsettled after Trump publicly criticized Powell on Thursday regarding interest rates.
The president reprimanded the Fed chair, calling for rate cuts and suggesting that Powell might be removed from his position. "If he wants him out, he’ll be out of there real fast,” Trump asserted. His remarks followed Powell's warning that the tariffs were "highly likely to generate at least a temporary rise in inflation" and his indication of no forthcoming rate cuts.
White House economic adviser Kevin Hassett later mentioned that the administration was exploring the legal avenues for potentially firing Powell before the completion of his term.
The escalating conflict has raised alarms among investors, even though Powell assured that he has no intention of resigning early and emphasized that the Fed's independence is a "matter of law."
Trump escalated his critique on Monday, branding Powell "Mr. Too Late, a major loser" in a post on Truth Social and cautioning that the economy would decelerate unless there were significant rate reductions.
US equities experienced another setback, with the Dow, Nasdaq, and S&P 500 all falling more than 3%.
Investors are now grappling with "a fresh source of macro anxiety: Trump’s threats to Fed independence," industry expert Adam Crisafulli from Vital Knowledge conveyed to CNBC on Monday.
According to Evercore ISI Vice President Krishna Guha, any move to dismiss Powell could result in a sharp sell-off in the US equity markets.
Trump selected Powell to lead the Fed in 2018, and he was reappointed by former President Joe Biden in 2022. Powell's term as chair is set to continue through May 2026.
Navid Kalantari contributed to this article for TROIB News
The ICE US dollar index, which measures the greenback against a collection of major currencies, dropped over 1% to 97.923, marking its lowest point since March 2022. The dollar also reached new lows against the euro, pound, yen, and Swiss franc, and weakened against the ruble, dipping below 80 for the first time since June 2024.
The currency has faced increased pressure since Trump introduced what he called "Liberation Day" tariffs on April 2, targeting various global trade partners. Market sentiment was further unsettled after Trump publicly criticized Powell on Thursday regarding interest rates.
The president reprimanded the Fed chair, calling for rate cuts and suggesting that Powell might be removed from his position. "If he wants him out, he’ll be out of there real fast,” Trump asserted. His remarks followed Powell's warning that the tariffs were "highly likely to generate at least a temporary rise in inflation" and his indication of no forthcoming rate cuts.
White House economic adviser Kevin Hassett later mentioned that the administration was exploring the legal avenues for potentially firing Powell before the completion of his term.
The escalating conflict has raised alarms among investors, even though Powell assured that he has no intention of resigning early and emphasized that the Fed's independence is a "matter of law."
Trump escalated his critique on Monday, branding Powell "Mr. Too Late, a major loser" in a post on Truth Social and cautioning that the economy would decelerate unless there were significant rate reductions.
US equities experienced another setback, with the Dow, Nasdaq, and S&P 500 all falling more than 3%.
Investors are now grappling with "a fresh source of macro anxiety: Trump’s threats to Fed independence," industry expert Adam Crisafulli from Vital Knowledge conveyed to CNBC on Monday.
According to Evercore ISI Vice President Krishna Guha, any move to dismiss Powell could result in a sharp sell-off in the US equity markets.
Trump selected Powell to lead the Fed in 2018, and he was reappointed by former President Joe Biden in 2022. Powell's term as chair is set to continue through May 2026.
Navid Kalantari contributed to this article for TROIB News
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