Battle for the Fed Control
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Why are markets reacting to Trump’s criticism of Fed Chair Jerome Powell?
So Jerome Powell is a loser who should carry rates straight away. Otherwise, Donald Trump will take your job away. That's enough to make many more people take their money away from America, or at least that seems to be what's happening today. But there's also the question over trade deals. We were promised lots, but will we actually see any? And to add to all of that, the China US rivalry continues to escalate. It's Tuesday, it's the 22nd of April 2025. It's the morning call from Knapp. Good morning. Well today markets have been open in the United States. They don't take Easter Monday off, and it has been quite active on the day the US dollar is down naught point eight percent, down to ninety eight point w uh four lower earlier.
In fact, the lowest it's been since April twenty twenty three. The Aussie and the pound are both up naught point six percent, the Aussie up to sixty four point two US cents. The Euro has risen one percent, naught point nine percent for the Swiss franc. But it's the New York Stock Exchange where the big Moves have been happening. A two point five percent fall in the Dow, two point four percent lower for the S P and two point six percent off the Nasdaq. They were all over three percent down before the last hour of trade in the United States. They picked up just before the close. Uh markets closed in Europe, of course, today, so nothing to compare there. Bond markets also closed in Europe, but in the US, ten-year treasuries are up nine basis points to four point four one percent, up eleven basis points.
Points for ten years in Canada. And oil is lower, two point one percent off WTI and Brent, Brent at sixty six fifty. Uh it where gold, meanwhile, is up three point two percent for comics, two point nine percent percent for spot gold, getting over three thousand four hundred and thirty this session, which is another new record high. So curiously, the angst on the share market is being blamed on Trump's words towards the Fed chair, Jerome Powell. He wants him to lower rates now. Uh and if not, he wants to oust him from the position. Well, I think he wants to do that anyway. Now Tapas Strickland is with me today.
What did the latest US equity and bond data reveal about market sentiment?
Uh is so is that really what is upsetting the markets? Because I mean, there is the question as to whether he can actually do that. Does he actually have the presidential power?
Good morning, Phil. Really I think it's a a combination of of two factors here and uh as you pointed towards uh Trump's words uh against Fed Chair Powell and he made some uh tweets on Thursday and followed that up again on Monday. There wasn't too much market reaction on Thursday to his initial comments, but a very strong market reaction obviously uh to his comments on Monday, given the three percent fall in US stocks there. Uh but you do raise the Uh good point. Uh is there much that Trump can actually do in terms of uh his rhetoric there? And uh the market. Became a bit more apprehensive, uh, particularly when uh a few comments from the National Economic Council director Kevin Hassett were mentioned on Friday.
And I think this was a key thing that really um started to cause a few market jitters, particularly in Asia on Monday, and more particularly in terms of US trading on Monday. So uh Kevin Hassett, he's the National Economic Council Director. Um and if you recall, the person who was in that role prior to Kim was uh former Fed Vice Chair Lal Brainard. Um so uh the person who occupies this position um knows very much about the need for Fed independence. And uh he noted that um that uh the Trump administration was studying whether uh the Trump administration is able to fire the Federal Reserve Chair, and he was also asked about his privy. And he wrote a book called The Drift, uh and in his twenty twenty one book, The Drift, uh he was arguing that firing power during Trump's first term uh would have harmed the reputation of the Fed uh and could have compromised the credibility of the dollar and crashed the stock market.
And then he was asked, Well, is this time any different?
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Chapters
6 chapters
1
Why are markets reacting to Trump’s criticism of Fed Chair Jerome Powell?
0:01–1:57
2
What did the latest US equity and bond data reveal about market sentiment?
1:57–5:24
3
How does the debate over Fed independence affect the US‑China trade war?
5:24–8:03
4
What legal challenges could limit the President’s power to fire the Fed chair?
8:03–11:19
5
How are escalating US‑China tariffs influencing global trade flows?
11:19–14:24
6
What are the implications of Europe’s ECB rate cut and upcoming data releases?
14:24–15:08