The Dow Jones Industrial Average is set to have its worst April performance since the Great Depression, The Wall Street Journal reported on Monday, as President Donald Trump’s nonsensical and chaotic trade policy is leading investors to pull their money from the stock market.
Trump’s decision to levy a 10% tariff on all imported goods, as well as the punishing tariffs on Chinese imports, has led economists to predict that the U.S. economy will see skyrocketing inflation and ultimately a painful recession that could cost millions of jobs.
“It’s impossible to commit capital to an economy that is unstable and unknowable because of policy structure,” Scott Ladner, chief investment officer at Horizon Investments, told the WSJ.
As of the end of business on Monday, the Dow was down more than 13% since Trump took office in January. And 10-year Treasury bond yields are rising as investors no longer believe they are a safe place to park their money—a fact that will make it more expensive for Americans to borrow money for things like home and car purchases.
Meanwhile, on Tuesday, the International Monetary Fund released its world economic outlook, finding that the U.S. economy is expected to slow dramatically due not only to Trump’s tariffs but also to the chaotic and unpredictable way he’s rolled them out.
The IMF now says the U.S. economy will slow to 1.8% growth, roughly 1 percentage point lower than last year’s growth rate.
The IMF wrote in an executive summary of their report:
Since the release of the January 2025 WEO Update, a series of new tariff measures by the United States and countermeasures by its trading partners have been announced and implemented, ending up in near-universal US tariffs on April 2 and bringing effective tariff rates to levels not seen in a century. This on its own is a major negative shock to growth. The unpredictability with which these measures have been unfolding also has a negative impact on economic activity and the outlook and, at the same time, makes it more difficult than usual to make assumptions that would constitute a basis for an internally consistent and timely set of projections.
No doubt because of things like that, Americans are souring on Trump as his policies threaten their financial security. Trump’s approval rating has fallen since he announced his “Liberation Day” tariffs, with voters now disapproving of his handling of the economy hitting a record low.
Trump is looking for a scapegoat for his own failures, landing on Federal Reserve Chair Jerome Powell, who has publicly said Trump’s policies are causing the financial market turmoil we are all witnessing.
However, Trump’s threats to fire Powell are leading markets to fall even more because investors fear that Trump ending the Federal Reserve’s independence will make the U.S. economy a less safe bet.
“Were Powell to be fired, the initial reaction would be a huge injection of volatility into financial markets, and the most dramatic rush to the exit from US assets that it is possible to imagine,” wrote Michael Brown, a senior research strategist with financial services firm Pepperstone.
“Any sign of the longstanding, independent nature of the Fed coming under threat would see investors across the globe selling every single US-based asset that they have, and also poses the genuinely scary prospect of upending the entire way in which the global financial system operates,” he added. “If this were to happen, then the reserve status of the dollar, and haven value of Treasuries, would be wiped out, probably forever in both cases.”
Lord help us.