Trump’s discord with the Fed: Should investors worry?

All major stock market indexes were rapidly low on Monday Dow Jones Industrial Average,,, S & P 500and NASDAQ-100 The recent decrease has been added by about 3% all day long.

The main reason for the decline is that President Donald Trump strengthens the pressure on Jerome Power, the president of the Federal Reserve Bank to lower interest rates. In social media posts, Trump warned that the US economy could slow down unless interest rates fell and Powell did so.

Certainly, criticism of Trump’s Fed, especially Powell, is not new. Trump appointed Powell during his first term, but despite the lack of inflation, he frequently accused PoWell for several years, leading to Covid-19 Pandemic due to interest rate hikes.

What is different this time?

This time, the main difference is that Trump has publicly mentioned Powell’s “end.” Although the president did not have the legal authority to dismiss the Chairman of the Federal Reserve (at least in most interpretations), he mentioned it. Even Congress cannot dismiss the Fed Chairman in accordance with the current law before the end of the term. It is reported that Trump not only suggests such opinions on social media, but also investigates whether Trump’s legal team can legally eliminate POWELL.

In the context, the term of PoWell as a Fed Chair is officially expired in May 2026. And PoWell made it very clear that he would finish his term, and Trump made it clear that he could not legally eliminate him.

Powell also discussed Trump’s trade war. He recently said, “For the time being, we are in a position to wait for greater clarity before considering adjustment of policy positions.” In other words, despite Trump’s criticism, he does not rush to a lower ratio.

Should investors worry?

Investors seem to be superior because the independence of the Federal Reserve has been the core of the US financial system for many years.

If Trump actually tried to launch Powell, some financial experts and notable politicians warned investors about what could happen. Senator Elizabeth Warren, who publicly questioned the Fed’s decision to keep the Fed’s interest rate relatively high, warned that the stock market could fall if Trump attempted to dismiss Powell. Krishna Guha, vice chairman of Evercore ISI, said the market will be sold out. CNBC’s chief analyst Ron Insana said that such a move would harm global trust in the United States.

Are investors already losing confidence?

There are signs that investors are already worried. In addition to plunge in the stock market, US dollars have weakened rapidly and are the lowest since the 2022 bear market. On the other hand, “safe” assets soared rapidly like gold and set records on Monday.

One of the big principles to keep in mind is that the stock market does not like uncertainty. This is a lot seen in recent market behavior. that CBOE volatility index (^VIX 14.06%)) It is often simply called “VIX” to usually measure the fear of investors in the stock market. A few weeks ago, it was not immediately after Trump’s tariff announcement, but VIX double Status immediately after the November presidential election.

Do investors have to worry or find a discount?

This is a million dollar questions. First of all, if you are a long -term investor, you don’t have to embarrass and sell your investments in the long run as long as you still apply. As a personal example, I am in my mid 40s and will not sell anything to my retirement account.

However, it may be wise to take a cautious approach to investment when investing new money to grow rapidly or work in a somewhat speculative company. It would be wise to expect that no one of us has a crystal ball that can predict the future, but it would not have seen the end of market volatility in 2025. This is an unprecedented situation, and all investors (or all experts) that can actually do are to guess what can happen in certain scenarios.

This is a favorable situation to gradually build a position of stocks or ETFs you want to own in the long run using the same strategy as the dollar cost average. Historically, if the S & P 500 withdraws more than 15% from the highest in recent years as in 2025, it is a good time to invest in the long term. This does not mean that stocks can no longer fall, so keep in mind this when searching for this turbulent market environment.