Wall Street suffered another sharp sell-off as Donald Trump stepped up his attacks on Federal Reserve chairman Jerome Powell.
In a post on social media site Truth Social yesterday, the US President said the economy would slow down unless Powell cut interest rates immediately, branding him ‘Mr. Too Late’ and ‘a major loser’.
Similar attacks last week saw Trump say Powell’s ‘termination’ as the US central bank boss ‘cannot come fast enough’.
The comments have fuelled fears that the Fed’s independence, a key plank of American economic credibility, is at risk due to Trump’s interference.
It sparked fresh declines in US stock markets with the S&P 500 dropping 2.4 per cent. The tech-heavy Nasdaq tumbled 2.6 per cent while the Dow Jones Industrial Average slumped 2.5 per cent.
The dollar also continued to weaken, hitting a seven-month low against the pound as doubts about the American economy persisted.
Threats: US President Donald Trump (pictured) said the economy would slow down unless Federal Reserve chairman Jerome Powell cut interest rates immediately
Trump’s renewed attacks on the Fed came as traders braced for the International Monetary Fund (IMF) to slash its economic growth forecasts as US tariffs ushered in a new era of trade protectionism.
The watchdog is expected to downgrade its predictions for global growth in a report published today, with the UK among the countries likely to be hit.
Growing pessimism meant Japan’s Nikkei fell 1.3 per cent yesterday while the Chinese CSI 300 index edged up 0.3 per cent on hopes Beijing could unveil stimulus measures to combat the effects of Trump’s tariffs.
The Hong Kong and London stock exchanges were closed for Easter Monday.
Global oil prices also declined due to concerns an economic slowdown will hit energy demand. International benchmark Brent crude was down 2 per cent at $66.58 a barrel.
The barrage of US trade tariffs unleashed by Trump this month has triggered an upheaval of global supply chains.
While many of the levies on other nations were ‘paused’ for 90 days on April 9 at 10 per cent to allow negotiations, the US has escalated its trade war with China by slapping tariffs of 145 per cent on imports from the country.
Beijing has responded by imposing a 125 per cent tax on American goods.
The vicious economic battle between the two superpowers meant uncertainty for the world economy was now ‘off the charts,’ IMF head Kristalina Georgieva said last week.
The institution is expected to stop short of predicting a recession, although Georgieva said its latest report would include ‘notable markdowns’ in growth.
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