Trump blames Fed for recession risks, roiling Wall Street, dollar as gold nears $3,500

Investor demand for safe-haven assets drove gold to a new all-time high on Monday, as mounting pressure from U.S. President Donald Trump on Federal Reserve Chair Jerome Powell rattled Wall Street.

Trump accused Federal Reserve Chair Jerome Powell of increasing recession risks by resisting interest rate cuts, triggering a broad sell-off across U.S. markets. Stocks fell by an average of 2.5%—as reflected in the Dow Jones Industrial Average, which tracks 30 of the largest U.S. companies, dropping 2.5% to 38,170.41; the S&P 500, a benchmark of 500 major firms across all sectors, falling 2.4% to 5,158.20; and the Nasdaq Composite, heavily weighted toward technology stocks, sliding 2.6% to 15,870.91.

Meanwhile, the price of gold surged to an unprecedented level above $3,457 per ounce, bolstered by investor flight to safety. On Tuesday, spot gold in Asian markets extended its gains, rising 1.5% to $3,491.56 per ounce. The rally, driven by fears that Trump’s protectionist trade stance could trigger a recession in an already fragile global economy, has resulted in a year-to-date increase of over 32%.

Bitcoin, the world’s largest cryptocurrency, also benefited from the market turbulence, climbing 1% to exceed the $88,000 threshold, approaching its previous peak near $90,000.

Oil prices fell by an average of 2% amid growing anxiety over a potential slump in demand. West Texas Intermediate (WTI) crude fell to $63.15 per barrel, while Brent crude was down at $66.75 per barrel.

The U.S. Dollar Index dropped to 97.9, marking its lowest level since March 2022. The euro strengthened to its highest level against the dollar since November 2021, reaching 1.1573.

‘Major loser’: Trump pressures Powell, seeks removal

Trump renewed his call for an immediate interest rate cut on Monday, warning that the American economy could face a slowdown. He also reiterated his criticism of Powell’s stance of maintaining rates until the inflationary effects of tariff policies become clearer.

Escalating his attacks, Trump berated the head of the independent central bank just days after threatening his job. In a social media post, he used a pejorative nickname for Powell, writing: “There can be a SLOWING of the economy unless Mr. Too Late, a major loser, lowers interest rates, NOW.”

Market participants are now turning their attention to this week’s meetings of the International Monetary Fund (IMF) and the World Bank, where central bank officials are expected to provide updated guidance. Türkiye’s Treasury and Finance Minister Mehmet Simsek will also attend those sessions.

Scheduled speakers on Tuesday include Federal Reserve Vice Chair Philip Jefferson, Philadelphia Fed President Patrick Harker, Minneapolis Fed President Neel Kashkari, Bank of England Deputy Governor Sarah Breeden, and European Central Bank Vice President Luis de Guindos.