By VK 
US Stock Market and Dollar Fell After Trump’s
Comments on Fed Chief-
1. What happened?
The stock market in America went down badly, and even the U.S. dollar became weak.
All this happened because Donald Trump publicly criticized Jerome Powell, the head of
America’s central bank.
2. What did Trump say?
Trump said that Powell is a “big failure” and that the economy is slowing down because of him.
He demanded that interest rates be reduced immediately so that it becomes easier for people
and businesses to borrow money.
3. How was the market’s reaction?
Investors were stunned by Trump’s statements.
Result:
The Dow Jones fell almost 1000 points
The S&P 500 and Nasdaq also fell below 2.5%
The U.S. dollar also weakened, compared to other currencies
4. What did investors do?
When the market seems risky, people look for money in safe places:
The price of gold reached a record $3,485 per ounce
People started buying government bonds, which are safer
5.Is this a problem?
Yes, because the Federal Reserve is an independent body.
It is not right to put political pressure on it. If the Fed works under political pressure, then:
Wrong decisions can be made
Inflation can increase
The economy can go into recession
6. What do experts say?
Experts say:
The Central Bank should take its own decisions, without any political influence
If leaders like Trump publicly exert pressure, then the trust of investors can decrease
Reducing interest rates too quickly can be risky
7. Summary:
Trump criticized the Fed chief, after which the market fell, the dollar weakened, and people
invested money in gold and bonds. Experts are saying that the Fed should keep its decisions
away from politics.