The US dollar continued its decline on Monday, reaching its lowest level in three years. Experts indicate that global investors are retreating from US assets as President Trump has criticized Federal Reserve Chair Jerome Powell.
This Monday, the ICE US Dollar Index, which is used to measure the country’s currency against several foreign markets, fell as low as 97.92. According to the index, the level had not reached this mark since March 2022. During the afternoon trading, the index continued to drop, and by 4:08 pm EST, the level was at 98.83.
Indicators show that this drop has continued since President Trump’s inauguration in January. The first round of mass dollar-selling occurred immediately after the Trump administration launched the reciprocal tariffs.
On Monday afternoon, President Trump attacked Federal Reserve Chair Jerome Powell on his Truth Social network. He and White House economic adviser Kevin Hassett called Chair Powell “Mr. Too Late” and “a major loser”. The Dow Jones lost 950 points after the post was published.
Investor worries have again been reignited, as the potential removal of the central bank’s chair calls into question the institution’s independence.
The US dollar hit a three-year low this morning pic.twitter.com/OSfeHerP2l
— Morning Brew
(@MorningBrew) April 21, 2025
The attacks on Mr. Powell came after President Trump called for the Fed to lower its rates, potentially the administration’s next move. Mr. Powell, who began his term in February 2018, has asserted the agency’s independence. His term is scheduled to end in May 2026.
Despite the dollar being the global reserve currency, and US assets steadily outperforming the rest of the world, American stocks and bonds have sharply declined through the tariff announcements and the ongoing trade war with China.
Several currencies have indeed gained against the dollar. For instance, the euro increased by 1.3 percent. This decline has been sustained throughout April. Since April 2, the S&P 500 has decreased by 9%, and the Nasdaq has fallen by nearly 10%.
US stocks tanked on Monday as President Trump hurled criticism at Federal Reserve Chair Jerome Powell again, sparking concerns of Fed independence at a time when markets have been reacting to the president’s whipsawing tariff policy.$GSPC -2.36%$IXIC -2.55%$DJI -2.48%… pic.twitter.com/iq0TdJOnQP
— Yahoo Finance (@YahooFinance) April 21, 2025
Some investors remain positive on equities, however. In a Monday note, Oppenheimer’s chief investment strategist, John Stoltzfus, said, “Pullbacks earlier this year have mostly looked like ‘trims’ and ‘haircuts’ for the S&P 500 whenever bears, skeptics, and nervous investors have found a catalyst to take near-term profits without FOMO (fear of missing out) amid what appears to us in fundamentals that persist in showing resilience like a very much intact bull market.”
The investor also said his favorite sectors were information technology, financials, industrials, consumer discretionary, and communications services.
