Trump's attacks on the Federal Reserve shake US markets

MADRIDWhile most of the world's stock markets spent Easter Monday with their shutters down, the roar continues in the United States. The Dow Jones, Wall Street's benchmark index, opened the session with its biggest drop since April 8, when Donald Trump announced tariffs on China of up to 104%—although the White House has already warned that he could increase them to 245%—and has already surpassed the slump of April 4. when Trump announced the battery of tariffs around the world.

Specifically, this stock market index registered a 2.5% drop at the close of trading (10 p.m. in Catalonia) and the S&P 500 – which groups the 500 largest listed companies in the country – has accumulated losses of 2.51%. The Nasdaq, the benchmark index for the technology sector, also fell sharply, with -2.55%. The underlying reason is not only the uncertainty that continues to hover over US policy, derived from the trade war, and consequently the fears of an economic recession, but also the attacks that Donald Trump maintains against the Federal Reserve and, specifically, against its president, Jerome Powell.

This Monday, the President of the United States once again demanded that Powell cut interest rates. Through his profile on the social media platform Truth Social, Trump has said that the trend in energy and food prices is reducing the risk of rising inflation, and therefore criticizes the Federal Reserve's decision not to raise interest rates for now, unlike other central banks, such as the European one. In Trump's eyes, the longer the Federal Reserve goes without lowering the price of money, the more the specter of an economic slowdown will grow.

"With these costs going down, just as I predicted, there can hardly be any inflation, but there could be a slowdown in the economy unless Mr. Massa Tard, a big loser, lowers interest rates," Trump said through his profile on Truth Social. "[Jerome] Powell has always been too late, except during election time, when he lowered rates to help Joe Biden get elected," he said. It was last Thursday when the President of the United States declared war on the Federal Reserve and demanded Powell's dismissal after he was reluctant to touch interest rates.

In the eyes of investors, the Federal Reserve is one of the jewels of financial stability in the United States, so Trump's frontal attacks on the institution and its independence are triggering concern among investors, who are looking ahead to the presentation of many companies' first-quarter results. Beyond the stock markets, gold has once again reached new highs and is now above $3,400 an ounce, while debt has rebounded to 4.37%.