Key Points
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Annualized returns for the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite have been higher under Donald Trump than most other presidents since the late 1890s.
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Trump has been a vocal critic of the FOMC’s approach to interest rates, and that continued this past week.
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The president’s critiques of the Fed’s policymakers can prove damaging to a historically pricey stock market.
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From a purely statistical standpoint, the annualized returns of the Dow Jones Industrial Average (DJINDICES: ^DJI), S&P 500 (SNPINDEX: ^GSPC), and Nasdaq Composite (NASDAQINDEX: ^IXIC) under President Donald Trump have been higher than most other presidents since the late 1890s.
However, these gains haven’t been earned without bouts of historic volatility and periods of heightened uncertainty.
Despite recent all-time highs for the Dow, S&P 500, and Nasdaq Composite, U.S. inflation is fostering worry among investors on Wall Street. But rather than let America’s foremost financial institution, the Federal Reserve, do what it does best, Donald Trump continues to take direct jabs at the Federal Open Market Committee (FOMC).
President Trump laid into the Fed, yet again
Shortly after taking office for his second, nonconsecutive term, the president began harping on now-former Fed Chair Jerome Powell and the other 11 members of the FOMC responsible for setting the nation’s monetary policy for not aggressively slashing interest rates. Despite the FOMC cutting the federal funds target rate six times to its current range of 3.50%-3.75%, Trump has been adamant that policymakers reduce interest rates to 1% or lower.
President Trump likely has several reasons for wanting lower lending rates:
- Lower borrowing costs encourage hiring, which can reduce the unemployment rate.
- It can spur spending on innovation and merger/acquisition activity, boosting economic growth.
- It would make it less costly for the U.S. to service its $39.3 trillion (and growing) national debt.
Although the president has acknowledged that the Fed is entitled to independence over its monetary policy decisions, this hasn’t stopped him from interjecting his views on countless occasions. For instance, he threw his handpicked Fed Chair, Kevin Warsh, under the bus just hours after Warsh’s swearing-in ceremony at the White House.
But no jab has been more direct than what President Trump said about the FOMC in an interview with CNBC’s Joe Kernen at the White House on July 2. In response to Kernen’s question about the jobs report giving Warsh and the FOMC more flexibility to cut interest rates, Trump retorted:
Well, he’s got a board that’s maybe a little bit hostile… and maybe a board that wants to do the wrong things, so I don’t know.
By “the wrong things,” Trump is likely referencing the latest Summary of Economic Projections (commonly referred to as the dot plot), released on June 17. Of the 18 participating FOMC members, not all of whom vote, nine projected that a rate hike will be needed before the end of 2026 to quell inflation driven by the Iran war.
Very hawkish dot plot.
Nine out of 18 officials have at least one hike this year (and six of those 9 have *multiple hikes*).
Only one person has a cut this year, and one participant (presumably Warsh) didn’t submit an SEP
The statement gets a complete writethru from top to… pic.twitter.com/KRwatpTFOP
— Nick Timiraos (@NickTimiraos) June 17, 2026
Although the prospect of higher interest rates is terrible news for a historically pricey stock market whose parabolic climb has been dependent on the partially debt-financed artificial intelligence data center build-out, the FOMC raising rates might actually be less of a drag on the stock market than Donald Trump’s repeated criticisms of the Fed.
Nothing is more important than Wall Street and investors having confidence in the central bank’s monetary policy. Every subtle and direct jab by President Trump threatens to undermine this credibility, which could have deleterious effects on the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite.
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