US stock markets slumped on Monday as Donald Trump warned of an economic slowdown unless the Federal Reserve cuts interest rates.

The US president ramped up his attacks on Fed chairman Jerome Powell by pressing him to cut rates immediately or risk slower economic growth.

Mr Trump said because inflation costs were falling, the US economy would stall unless rates came down. 

“With these costs trending so nicely downward, just what I predicted they would do, there can almost be no inflation, but there can be a slowing of the economy unless Mr. Too Late, a major loser, lowers interest rates, now,” he said on his Truth Social platform. 

The attack on the Fed prompted a fresh sell-off on the US stock markets on Monday.

The S&P 500 fell 2.1pc to touch 5,171.60 while the Nasdaq declined 2.6pc, led lower by the Magnificent 7 tech stocks to 15,857.07.

Tesla fell by 6.7pc while Nvidia fell by 5.3pc.

Investors have become increasingly alarmed over Mr Trump’s attacks on the US central banker, which are seen as a threat to its independence.

Markets in the US were closed on Friday for a public holiday, making Monday the first chance for investors to react to news that the President was exploring plans to fire Mr Powell.

Tariff wars have already alarmed markets, with all major US indices losing $10 trillion in the weeks following Mr Trump’s “liberation day” tariffs.

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