US stocks skidded on Tuesday and the pound surged to a seven-month high against the dollar after President Donald Trump doubled down on attacks on Federal Reserve Chair Jerome Powell.

US stock markets faced a significant decline on Tuesday, with the Dow Jones dropping 2.48%, the S&P 500 index sinking by 2.4%, and the Nasdaq slipping by 2.55%. The plunge coincides with President Donald Trump's intensified criticism of Federal Reserve Chair Jerome Powell, questioning the independence of the federal reserve amidst concerns over economic stability. Trump suggested in a Truth Social post that the US economy could decelerate unless interest rates are urgently lowered. Following this, speculation heightened around the possibility of Trump trying to dismiss Powell, as indicated by White House economic adviser Kevin Hassett’s comments. In stark contrast, the British pound soared to a seven-month high against the dollar, gaining 0.3% and reaching $1.342. This increase reflects a mix of market sentiment influenced by Trump's rhetoric along with economic indicators from the UK. Analysts suggest that the pound's strength may also be bolstered by geopolitical factors and expectations of monetary policy shifts from the Bank of England amid ongoing trade discussions. Moreover, gold prices touched an all-time high of over $3,500 per ounce amid fears of inflation and market instability, as investors seek safer assets amid rising geopolitical tensions. Bank of England official Megan Greene commented that US trade tariffs are likely to produce a disinflationary effect on the UK economy. However, her remarks also highlighted the inherent uncertainties in the global economic landscape. The commentary surrounding Trump's criticism of the Fed raises vital questions about the agency's independence. Economists generally agree that politically-independent central banks tend to better manage inflation and maintain economic stability. Thus, Trump's stance could further complicate the already volatile economic environment, stirring investor unease and affecting market dynamics globally. Market professionals will be looking closely at upcoming economic data releases, including the April Purchasing Managers’ Index (PMI) and the UK's retail sales data, which could influence central bank decisions and overall economic sentiment moving forward.