A new collapse chapter of Stock Exchange It happened today, after the president Donald Trump intensify his attacks against the president of the Federal ReserveJerome Powell, putting the independence of the Central Bank at risk.
The three main stock market indices in the United States registered strong losses and the group of technological actions of great capitalization known as the “Magnificent Seven,” pressed the Nasdaq, focused on technology.
The S&P 500 (.SPX) lost 2.36%, the Nasdaq composite fell 2.55%and the Dow Jones industrial average fell 2.47%. Asian bags finished the day with losses as well as the European ones.
For its part, the Lima Stock Exchange (BVL) fell 0.67%, the Package of Peruvian shares listed on the BVL (ETF EPU) fell 0.02%. Similarly, the Santiago Stock Exchange closed at -0.82% and the Colombian Stock Exchange at –0.43%. However, Mexico and Brazil closed upwards.
“The fall is related to political tensions and commercial and financial uncertainty. The trigger was Trump’s attack to the president of the Fed. That pressure, the market interpreted it as direct threat to the independence of the Central Bank. With this, the 90 -day pause of the tariffs failed to calm the companies and investors,” said César Huiman, a senior analyst of Equity Research.
“The BVL descended around 0.67%, explained mainly by the negative unemployment of international financial markets, given the renewed criticism of President Donald Trump towards the president of the Federal Reserve, Jerome Powell, and ongoing commercial tensions, which has generated uncertainty among investors,” said Silvana Carao, a strategy analyst and analysis of Intell.
Trump intensified his criticisms today against the head of the Fed, Jerome Powell, through social networks, qualifying him as a “great loser” and demanding that he lower interest rates immediately.
“With these costs going down as well, as I predict that they would do it, there can hardly be inflation, but there may be a slowdown of the economy, unless the Lord too late, a great loser, lowers interest rates, now,” Trump wrote in Truth social referring to Powell.
The Economic Advisor of the White House, Kevin Hassett, said Friday that the president and his team continued to evaluate whether they could dismiss Powell, a day after Trump affirmed that the dismissal of the president of the Fed “cannot come quickly enough”, demanding a fence of fees.
The Fed has played an important role in the world economy, due to its role in economic stabilization and the regulation of monetary policy. Their decisions about interest rates and money supply can impact the economies of other countries, since many currencies and markets are linked to the dollar.
The independence of the Central Bank is important because it allows to ensure price stability by allowing monetary decisions based on technical analysis instead of short -term political pressures, which in turn generates greater credibility and confidence in the economy. Independent central banks have historically demonstrated a great capacity to manage inflation.
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