Wall Street is currently experiencing a resurgence of the controversial "Sell America" trend, spurred by heightened tensions between the Trump administration and Federal Reserve Chair Jerome Powell. This situation has led investors to reassess their confidence in U.S. financial markets, resulting in a significant sell-off of American stocks, bonds, and the dollar.
On Monday morning, stock futures reflected this unease, with the Dow futures dropping by 350 points, or approximately 0.7%. Similarly, S&P 500 futures fell by 0.6%, while those tied to the Nasdaq experienced a decline of 0.9%.
In addition to stocks, the U.S. dollar showed weakness against several major currencies. The dollar index, which measures the dollar's strength relative to six other currencies, slipped by 0.4%, marking a noteworthy decline for the greenback.
Treasury yields also experienced a slight uptick. The key 10-year yield, which moves inversely to bond prices, rose to just below 4.2%, nearing a one-month peak. This rise in bond yields suggests that the actions taken by the Trump administration against the Fed may have unexpected consequences, indicating that interest rates might not decrease as the president has been urging.
The independence of the Federal Reserve is widely regarded as a fundamental element that contributes to the robustness of U.S. financial markets. Many investors, economists, and historians believe that a central bank operating independently from political pressures is crucial for maintaining stability in financial systems, as it enables policymakers to craft monetary policy without being influenced by short-term political objectives.
Last year, the Trump administration launched an unprecedented attack on the Fed’s autonomy, openly criticizing Powell for not implementing interest rate cuts swiftly enough. While lower interest rates can reduce costs for consumers through cheaper credit card rates and borrowing, there is a risk associated with hastily lowering rates—namely, that it could create anxiety among investors about rising inflation, leading them to demand higher returns for investing in U.S. assets.
“This clearly indicates a move towards risk aversion,” noted Krishna Guha, vice chairman at Evercore ISI, in a note released on Sunday.
The trades observed on Monday are reminiscent, although less pronounced, of the "Sell America" movement seen in the spring of 2025, when concerns over Trump’s trade policies prompted a mass exit from American assets. At that time, both bonds and the dollar plummeted, and stocks nearly entered a bear market before recovering sharply later in the year as Trump softened his stance on some of his more aggressive tariff threats.
Guha emphasized, “We anticipate a fall in the dollar, bonds, and stocks during Monday’s trading, mirroring the reaction seen in April of last year when fears regarding tariffs peaked alongside threats to Powell’s position as Fed chair. Global investors are likely to apply a higher risk premium to U.S. assets.” He added that safe-haven assets such as gold should see gains as a result of these developments.
Indeed, gold, often viewed as a refuge amid economic uncertainty, surged by 2%, hitting record highs above $4,600 per troy ounce early Monday morning. Silver, another asset considered a safe haven, outperformed gold with a remarkable increase of 6%.
The rise in precious metals like gold and silver, particularly in response to renewed threats against the Fed’s autonomy, illustrates a phenomenon Wall Street refers to as the "debasement trade." In this context, investors flock to gold and silver—assets that retain intrinsic value and are not reliant on the credibility of any government or institution—due to growing concerns that U.S. currencies and bonds will diminish in value amid increasing pressure on central banks, rising debt levels, and doubts about their credibility.
In 2025, market participants experienced moments of intense anxiety as President Trump publicly criticized Powell, branding him as "too late" and casting doubt on his capability to lead the central bank.
Guha noted, "Our perspective has been that while markets are wary of threats to the Fed’s independence, they had grown accustomed to Trump's aggressive rhetoric and would not react to this fear unless presented with clear corroborating evidence." He went on to suggest that the subpoenas and Powell’s response to them might just serve as that compelling evidence.
