The recent clash between US President Donald Trump and Federal Reserve Chair Jerome Powell has caused turmoil in traditional financial markets, with the stock market and the dollar experiencing significant declines. On April 21, the S&P 500, Nasdaq, and Dow Jones all closed in the red, with losses ranging from 2.4% to 2.5%. The S&P 500 is down over 12% since the beginning of the year, while the Nasdaq has dropped nearly 18%, particularly affecting US tech stocks.

This downward trend in the stock market is a result of escalating tensions between Trump and Powell, exacerbated by concerns over trade tariffs. Trump has been vocal about his desire for interest rate cuts, criticizing Powell for keeping rates high at 4.5%. Powell, on the other hand, has warned that Trump's trade tariffs could lead to "stagflation," a dangerous economic scenario of rising prices and slowing growth. The Federal Reserve is expected to maintain its current policy stance at its upcoming meeting on May 7, with only a 13% chance of a rate cut, according to CME Fed Watch.

Simultaneously, the US Dollar Index (DXY) has depreciated by more than 10% this year, reaching a three-year low below 98 on April 21. This devaluation has been driven by global demand for a weaker dollar to service dollar-denominated debts, according to Real Vision's CEO Raoul Pal.

Despite the turmoil in traditional markets, the cryptocurrency market has shown resilience, with a total market capitalization of $2.83 trillion at the time of writing. Bitcoin, in particular, has been a stabilizing force, reaching a four-week high of $88,500 on April 22. Analysts at Bitfinex have noted Bitcoin's impressive resilience amid the global market turbulence.

As traditional markets struggle with uncertainty and volatility, some observers are looking to cryptocurrencies as a potential safe haven or hedge against economic instability. The crypto market's ability to maintain its value and even see gains during times of turmoil in traditional markets highlights its growing importance and acceptance as a legitimate asset class.

In conclusion, the ongoing tensions between Trump and Powell, coupled with concerns over trade tariffs and economic uncertainty, have led to significant turmoil in traditional financial markets. In contrast, cryptocurrencies like Bitcoin have demonstrated resilience and stability, attracting attention as potential investment options during times of market instability.

Source: https://cointelegraph.com/news/us-dollar-stocks-tumble-while-crypto-gains-as-trump-amps-up-powell-pressure?utm_source=rss_feed&utm_medium=rss&utm_campaign=rss_partner_inbound