Trading Day: Trump pummels Powell

Jamie McGeever - Reuters - 21/04
TRADING DAY
ORLANDO, Florida, April 21 (Reuters) - TRADING DAY
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By Jamie McGeever, Markets Columnist
America's 'emerging market tendencies'
If there's an upside for U.S. markets to President Donald Trump's verbal tirade against Federal Reserve Chair Jerome Powell, it's not immediately obvious - Wall Street, the dollar and long-dated Treasuries all tanked on Monday, and investors are bracing for further volatility.
Gold, the yen and key European currencies all rose sharply. But with the credibility of U.S. policymaking and governance at the root of the market turbulence, Treasuries and the dollar are longer part of that club of core 'safe haven' assets.
More on that below, but first, a round-up of Monday's main market moves. I'd love to hear from you, so please reach out to me with comments at [email protected], opens new tab. You can also follow me at @ReutersJamie, opens new tab and @reutersjamie.bsky.social, opens new tab.
If you have more time to read today, here are a few articles I recommend to help you make sense of what happened in markets.
  1. US multinationals extend currency hedges to counter Trump's tariff volatility
  2. China warns countries against striking trade deals with US at its expense
  3. Tariff deal talks to dominate IMF-World Bank meetings this week
  4. Trump studying whether to fire Fed Chair Powell, adviser says
  5. BOJ likely to keep rate-hike signal intact despite Trump tariff risks, sources say
Today's Key Market Moves
  • Wall Street slumps, with the S&P 500, Nasdaq and Dow all losing 2% or more. The Nasdaq slips back into bear market territory.
  • All 10 sectors in the S&P 500 end in the red, led by consumer cyclicals falling 2.8%. Eight sectors lose 2% or more.
  • The dollar tanks, to a 10-year low against the Swiss franc and a three-year low against a basket of G10 currencies.
  • The euro climbs to $1.1573, highest since November, 2021.
  • Gold leaps nearly 3% to a fresh high of $3,430/oz.
  • Treasuries undergo substantial curve steepening, with the 2-year yield falling 6 bps and 30-year yield spiking 10 bps.
  • U.S. 2s/30s curve steepens to 115 bps, its highest closing level since January 2022.
  • Oil falls more than 2% - Brent crude settles at $66.26/bbl.
Trump pummels Powell
The U.S. President is known more for doubling down than backing down, so in that sense his renewed attacks on Fed Chair Powell should come as no surprise. But they are still no less astonishing for that.
In a pointed post on his Truth Social platform, Trump said the U.S. economy is headed for a slowdown "unless Mr. Too Late, a major loser, lowers interest rates NOW."
It is the latest in a series of criticisms that investors see as blatant attempts at political interference with the monetary policy setting process, and direct attacks on...
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