Powell Declares War on Trump, Drops 2 Bombshells Late at Night, Dollar and US Stocks Face Double Blow

The Federal Reserve’s interest rate meeting that influences global financial markets has finally concluded. Unsurprisingly, they kept rates unchanged. However, beyond pausing rate cuts, Powell delivered two major shocks to the U.S. dollar capital markets, directly triggering a new wave of selling on Wall Street.

What kind of “big bomb” did Powell drop that turned the market from “prepared” to “collectively panicked”?

What exactly did Powell say?

According to the latest reports from overseas financial media, on the evening of March 18, the Federal Reserve announced its latest monetary policy decision, maintaining the U.S. dollar interest rate at 3.5%-3.75%.

This was within the expectations of Wall Street traders.

What truly scared the market was that the Fed included in its policy statement that “the development of the Middle East situation still poses uncertainties for the U.S. economy.”

What frightened U.S. stocks the most was that among the voting Federal Reserve officials, only one opposed this decision.

Previously, Waller, who was a strong supporter of Trump’s rate cut policies, suddenly changed his stance and supported keeping rates steady.

After the monetary policy announcement, Fed Chair Jerome Powell delivered an important speech.

The core points were twofold: First, the progress in combating inflation is “not as significant as previously hoped”; second, if we do not see progress on inflation, there will be no rate cuts.

He even openly acknowledged that “some oil price shocks will be reflected in core inflation.” The message is clear: with the ongoing U.S.-Iran conflict and the Strait of Hormuz being blocked, oil prices in parts of the U.S. have already surged significantly.

This will directly impact the transportation and chemical industries in the future. A new round of inflation is inevitable. Under these circumstances, not only is a rate cut unlikely, but future rate hikes are also highly probable.

For many years, the market has formed an almost superstitious consensus: as long as the stock market falls hard enough, the Fed will not sit still—either easing or cutting rates to rescue the market. This expectation has been like a comforting pill for investors.

But this time is completely different. No one knows how long the U.S.-Iran conflict will last, as the decision-making power clearly does not rest with Trump.

After the decision was announced, both U.S. stocks and gold accelerated their decline. The two most liquid asset classes were sold off—this was panic, a instinctive move to seek cash and safety.

This “abandonment of support” stance is far more frightening than mere hawkish rhetoric. Hawkish officials simply tell you “I won’t give you sugar now,” but Powell is telling Wall Street that don’t expect the Fed to backstop further declines in stocks.

At this point, it’s no longer just about a rate decision. It’s like a mirror reflecting the deep-rooted challenges facing the global economy and financial markets in 2026: the “anchor” that once stabilized everything is loosening.

This “anchor” has largely been the direction and cost of dollar liquidity, i.e., the Federal Reserve’s monetary policy. When it loosens, global assets celebrate; when it tightens, emerging markets shake. But now, this “anchor” itself is in trouble.

On one side is energy-driven inflation intensified by geopolitical tensions; on the other, the economy may be under pressure from high interest rates. The Fed is caught in a dilemma, and its choice is: to maintain credibility for price stability, it may temporarily sacrifice asset prices.

This means the old cycle of “easing—rising—crisis—more easing” may truly be coming to an end.

Money can’t stay “cheap” forever. For capital accustomed to borrowing cheap dollars for global arbitrage, and for assets valued based on expectations of unlimited liquidity, this is undoubtedly the start of a purge.

The stock market decline earlier this year may just be the first chapter of this long “value re-evaluation” story.

For China, in the short term, the strong dollar eases pressure on the yuan to appreciate, but on the other hand, a strong dollar acts like a pump, attracting global capital back to the U.S., tightening liquidity in other markets.

Therefore, Powell’s speech is not just a hawkish statement but a direct declaration of war against President Trump. Powell even hinted that he might stay at the Fed until 2028, adding chaos to Trump’s monetary policies.

Author’s note: Personal opinions only, for reference.