US Dollar and Stocks Slide as Trump Ramps Up Pressure on Fed; Crypto Surges

Trump Pressures Fed to Cut Rates as Dollar and Stocks Sink; Crypto Rallies

U.S. financial markets are facing renewed volatility as President Donald Trump intensifies his criticism of Federal Reserve Chair Jerome Powell, demanding immediate interest rate cuts. The clash has sent shockwaves through traditional markets, with U.S. stocks falling and the dollar sliding to multi-year lows — while cryptocurrencies continue to surge.

In an April 21 post on his Truth Social platform, Trump reiterated his call for “preemptive cuts” to interest rates, arguing that inflation has largely cooled across major sectors.

“With energy costs way down, food prices substantially lower, and most other ‘things’ trending down, there is virtually no inflation,” Trump wrote.

The president has also ramped up personal attacks on Powell, calling him “Mr. Too Late” and a “major loser,” while criticizing the Fed’s current policy stance of keeping interest rates at 4.5%. He has repeatedly called for Powell’s removal, stating, “His termination cannot come fast enough.”

US stock heatmap. Source: TradingView

Powell Responds, Warns of Stagflation Risks

Fed Chair Jerome Powell fired back last week, warning that Trump’s aggressive trade tariffs could lead to stagflation — a scenario where inflation persists even as economic growth stalls. The Fed, which is next scheduled to meet on May 7, is expected to maintain its current wait-and-see approach.

According to the CME FedWatch Tool, markets are pricing in only a 13% chance of a rate cut at the upcoming meeting, suggesting limited confidence that Trump’s pressure will sway monetary policy in the near term.

Dollar Hits Three-Year Low

The ongoing tension and policy uncertainty have taken a toll on the U.S. dollar. The U.S. Dollar Index (DXY), which measures the greenback against a basket of major currencies, dropped to a three-year low below 98 on April 21. The index is down more than 10% since the start of the year.

“Everyone needs and wants a weaker dollar to service their dollar debts,” said Raoul Pal, CEO of Real Vision, in a post on April 22. “This is the purest form of global liquidity and is the largest driver of global M2 [money supply] currently.”

A weakening dollar often fuels demand for alternative assets like gold and cryptocurrencies, and recent trends have echoed that pattern.

Source: Donald Trump

Bitcoin Breaks Higher as Crypto Market Holds Steady

While traditional markets face turbulence, digital assets are showing strength. The total cryptocurrency market capitalization held steady at $2.83 trillion, with Bitcoin (BTC) leading the charge.

Bitcoin surged to a four-week high of $88,500 on April 22 and was trading at $88,011 at the time of writing.

“Amid one of the most turbulent periods for global markets in years, Bitcoin is showing impressive resilience,” analysts at Bitfinex noted in a recent market update.

The broader crypto market appears to be benefiting from investor unease in traditional finance, with many turning to digital assets as a hedge against macroeconomic instability and a weakening dollar.

Outlook

As Trump continues to apply pressure on the Fed and stoke policy uncertainty, financial markets are likely to remain volatile. With inflation debates, central bank independence, and geopolitical tensions all in the mix, investors are bracing for an eventful second quarter — and crypto may be one of the few sectors to emerge stronger.