Trump’s’ palace forcing ‘Powell: The historic reconstruction of the US dollar credit crisis and the gold market

On April 22, 2025, the international financial market experienced severe turbulence due to the intense game between the Trump administration and the Federal Reserve. US President Trump has continuously criticized Federal Reserve Chairman Powell on social media, calling him the “biggest loser” and “Mr. Too Late,” and threatening to “immediately let him go. This statement directly triggered a “Black Monday” in the US stock market – the Dow Jones Industrial Average plummeted 2.48%, the S&P 500 fell 2.36%, the Nasdaq plummeted 2.55%, and the US dollar index fell below the 98 level to 97.923, hitting a new low since 2023. At the same time, spot gold prices surged to $3599.93 per ounce during the Asian session, up 1.63% from the previous day and approaching the integer level of $3500, setting a new historical high and breaking records. Market concerns about the “US dollar credit crisis” have reached a critical point.

Event context and deep-seated contradictions

Trump’s attack on Powell has been ongoing for several months. On April 17th, he posted on social media that “Powell should have cut interest rates like the European Central Bank” and threatened “the earlier he leaves, the better”. On April 21st, he further accused Powell of “damaging the US economy”, stating that his policies had led to soaring business costs and a stock market crash. According to insiders, the Trump team has privately discussed the feasibility of firing Powell and is considering replacing him with former Federal Reserve Governor Kevin Walsh or current Governor Brainard.

Behind this action is Trump’s dual goal:

Economic stimulus: offsetting the negative impact of tariff policies by pressuring interest rate cuts. The core PCE price index in the United States rose to 2.9% year-on-year in March, but the GDP growth rate in the first quarter slowed down to 1.8%, increasing the risk of stagflation. Trump attempted to attribute the economic difficulties to Powell’s’ policy lag ‘.

Political game: paving the way for re-election in 2026. If the Federal Reserve cuts interest rates before the election, it may boost market confidence, but if Powell refuses to compromise, Trump needs to reshape the policy path through a “replacement”.

Powell has repeatedly emphasized the independence of the Federal Reserve. On April 16th, he made it clear in a public speech that “the decisions of the Federal Reserve are based on economic data, not political pressure.” According to US law, the President has no right to dismiss the Federal Reserve Chairman at will unless it can be proven that he has “malfeasance or improper behavior. Historical precedents show that policy differences cannot constitute grounds for dismissal. Powell has stated that if faced with legal challenges, he will fight to the end through judicial procedures.

But Trump is trying to break through this tradition. He declared at the White House meeting on April 21st, ‘If I want him to resign, he will have to leave soon.’ His team even plans to push the Supreme Court to reinterpret the Federal Reserve Act, weakening the independence of the central bank.

Institutional Warning and Risk Warning

Goldman Sachs warns that if the Federal Reserve becomes a political tool, the US dollar may be overvalued by 20%, and gold prices may soar to $4500 per ounce. Bilbao Bank strategist Cuadrado pointed out, “Independence is the core asset of the US dollar. If the market is concerned about government intervention in the central bank, the credit of the US dollar will suffer irreversible damage

Short term overbought risk: With a daily RSI of 78, there is a need for technical correction, and the $3500 level may trigger profit taking. The support levels below are at $3450 (5-day moving average) and $3420 (10 day moving average); Policy Black Swan: If the minutes of the Federal Reserve meeting on April 23 release a “hawkish signal” or if the Trump administration unexpectedly eases tariff policies, it may lead to a rapid decline in gold prices.