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U.S. stock markets dropped again on Monday as President Donald Trump escalated his attacks on Federal Reserve Chair Jerome Powell, whom he labeled “a major loser” for not cutting interest rates.“There can be a slowing of the economy unless Mr. Too Late, a major loser, lowers interest rates, NOW,” Trump wrote on social media.In recent days, Trump has intensified pressure on Powell to reduce rates in order to counter the inflationary effects of his newly announced tariffs.Trump is widely seen as pushing the Fed to act in hopes of appeasing jittery markets, which have slumped since his announcement of sweeping new trade duties. However, Wall Street appears to be responding negatively to Trump’s increasingly personal criticisms of Powell and perceived threats to the central bank’s independence.On Monday, the Dow fell 2.5%, the tech-heavy Nasdaq Composite dropped more than 2.5%, and the S&amp;P 500 slid 2.4%. Tech giants like Tesla and Nvidia lost ground, and the dollar fell to multi-year lows against most major currencies.Markets had previously rebounded from losses following Trump’s “Liberation Day” tariff rollout, which proposed steep levies on virtually all of America’s trading partners. But much of those gains have now been erased amid renewed tensions over Fed policy.Powell, typically reserved in public remarks, has recently cautioned that Trump’s tariff strategy could put the Fed in a difficult position and suggested there’s no imminent plan to cut rates.“Tariffs are highly likely to generate at least a temporary rise in inflation. The inflation effects could also be more persistent,” Powell told reporters on April 16.U.S. inflation peaked at 9% in June 2022 and has gradually declined, thanks largely to the Fed’s steady interest rate increases. The central bank has targeted 2% inflation, and as of last month, inflation had cooled to 2.4%—though that figure doesn’t yet reflect the impact of Trump’s new tariffs.The Fed operates under a dual mandate: controlling inflation while maximizing employment. Though rate hikes risk job losses, the Fed has thus far managed to bring down inflation while maintaining an unemployment rate near 4%.Still, Trump has floated the idea of firing Powell, whose term runs through May 2026. “Powell’s termination cannot come fast enough!” Trump posted on social media last week.Such a move would be unprecedented and could spark major market turmoil. Krishna Guha, vice-chair of Evercore ISI, told CNBC that removing Powell would trigger a “severe reaction” in financial markets.“I can’t believe that’s what the administration is trying to achieve,” Guha said.