Stock markets tumbled on Monday after President Trump renewed his vitriol against Federal Reserve Chairman Jerome Powell, lambasting the central banker for his hesitancy to lower interest rates. 

Mr. Trump launched a barrage of attacks against Mr. Powell on Monday morning in a series of posts on Truth Social, beginning by declaring that there is “virtually No inflation” before warning that the economy will slow down “unless Mr. Too Late, a major loser, lowers interest rates, NOW,” he wrote. 

The 47th president continued by accusing the central banker of acting on political motivations, claiming that “Powell has always been ‘To Late,’ except when it came to the Election period when he lowered in order to help Sleepy Joe Biden, later Kamala, get elected.” Mr. Trump then asked: “How did that work out?”

Wall Street’s main indexes — already reeling from the uncertainty surrounding Mr. Trump’s tariff scheme — slumped significantly Monday. The Dow Jones Industrial Average ended the day down 2.5 percent while the S&P 500 and the Nasdaq had declined 2.4 percent and 2.5 percent, respectively.

Mr. Trump’s latest comments stoke mounting speculation that the president will try to remove Mr. Powell before his tenure ends in May 2026 — a move which the president’s Treasury Secretary, Scott Bessent, has privately warned against, citing the risk of destabilizing financial markets.  

That became the subject of discussion last week when the president unleashed a similar attack on the Fed chairman after Mr. Powell offered a grim warning about the potential economic effects of the president’s tariff plan. Mr. Powell, who was speaking before the Economic Club of Chicago, fretted that the tariff increases could lead to higher inflation and slower growth — a dreaded stagflation economy. 

Additionally, to the ire of the president, Mr. Powell stopped short of disclosing whether the Fed was eyeing a rate cut at the next Federal Open Market Committee in May, explaining that “For the time being, we are well positioned to wait for greater clarity before considering any adjustments to our policy stance.” 

His address spooked Wall Street — which saw stocks tumble before the market close that day — and appeared to irk the 47th president who, the following day, berated the chairman in an early morning post on Truth Social.

“Powell’s termination cannot come fast enough!” Mr. Trump proclaimed. He upped the ante during a meeting at the Oval Office the following day, insisting that “If I want him out, he’ll be out of there real fast, believe me,” he said, referring to Mr. Powell. 

In spite of the president’s confidence, however, it is not entirely clear whether Mr. Trump has the legal standing to prematurely oust the Fed chairman. Some legal scholars are eyeing an upcoming Supreme Court ruling — Trump v. Wilcox — to set a key precedent. Others point to a recent High court decision in Seilla Law LLC v. Consumer Finance Protection to bolster Mr. Trump’s claim. 

Proponents of an independent Fed argue that elected officials are likely to prioritize strong economic growth and lower interest rates — to capture the favor of the public — even if the policy is inflationary in the long term. Without political pressures, Fed officials may be more willing to make unpopular decisions, like increase interest rates, if they help improve the economy down the line.