The US dollar plunges after Trump attacks Fed Chairman
According to the Financial Times, on April 21, the value of the US dollar sharply declined following President Donald Trump’s attacks on Federal Reserve Chairman Jerome Hayden Jay Powell.
The US dollar fell by 1.1%, hitting its lowest level in the past three years. Meanwhile, gold prices rose by 2% to a new record high of $3,393 per ounce (1 ounce = 28.34 grams). The Swiss franc reached its highest level in 10 years with a 1.2% increase, while the euro rose by 1.1% and the yen by 1%.
On April 17, President Trump expressed dissatisfaction with the Fed's slow response in cutting interest rates:
"Powell will be out if I ask him to. I’m not happy with him and I’ve let him know. Believe me, if I want him gone, it will happen very quickly."
On April 18, White House Council of Economic Advisers Chairman Kevin Hassett confirmed that Trump is still “continuing to look into” the issue of firing Federal Reserve Chairman Jay Powell.
Following Hassett’s remarks, many hedge funds quickly dumped US dollars.
"Threatening Powell only further shakes international investor confidence in US assets," said Will Compernolle, an analyst at FHN Financial in Chicago.
However, some experts believe that "although the news surrounding Powell has affected market sentiment, the main reason remains the negative developments in the global trade war."
Yujiro Goto, a foreign exchange strategist at Nomura Securities, shared:
"While bond sell-offs and currency depreciation happening simultaneously in emerging markets is not unusual, it is quite surprising to see it happening in a major reserve currency market like the US."
Analysts at CICC – a Chinese investment bank – stated in a report on April 20 that policy uncertainty in the US is making the dollar and treasury bonds "behave like risky assets." Moreover, recent remarks by Trump regarding Chairman Powell "further fuel market concerns over the Federal Reserve’s independence."
The Financial Times cited investors and analysts saying that any attempt to remove Powell before the end of his term (expected in May 2026), or to exert pressure on monetary policy, could trigger market volatility in the US.
