The hardest thing about investing with someone like Donald Trump leading the most important economy in the world and influencing the most important financial markets on the planet, is the fact that he is unique in the history of US politics. This revelation is appropriate, as Wall Street plummets again on the President’s threats to sack Federal Reserve boss Jerome Powell, while ordering him to cut interest rates “NOW!”

When the Russia-Ukraine war started, I could point out to my financial planning clients, subscribers to The Switzer Report and Switzer Daily readers how the history of geopolitical crises often had short-term impacts on stock markets.

When stocks slumped in 2022 because central banks imposed big rises in rates on borrowers, I could prepare clients for a sell-off of stocks, out of which a buying opportunity would emerge.

Being an economist, financial adviser and media commentator for decades means I know the history of economies, stock markets, bond markets and the usual behaviour of political leaders when these crises come along.

However, Donald Trump is a human curve ball. While in the fullness of time he might get away with what he wants with his tariffs as well as bullying Jerome Powell to cut US rates, currently he is spooking financial markets. As a result, safe haven gold is surging, and stock prices are nosediving!

As a consequence, investors and superannuation members are losing wealth. Yep, it will rebound in time, but given the uniqueness of Trump, I can’t make short-term predictions of what is about to happen.

Covid was another case in point. People like me had to react to the short-term impacts of Covid. However, along with other market commentators, I’d never studied pandemics, so that made it hard to advise with confidence. Even the world’s central banks got the inflation effect of the Coronavirus wrong. That’s why they had to raise rates aggressively in 2022 to make up for their mistakes during the Covid lockdowns.

Overnight, the Dow lost 971 points (or 2.48%), the S&P 500 gave up 2.36% and the Nasdaq slumped 2.55%. And this is s all Trump created.

CNBC captured what spooked the market overnight.

“In a Truth Social post, Trump claimed that the economy would slow unless Powell — who he referred to as “Mr. Too Late, a major loser” — lowered interest rates immediately,” Lisa Kailai Han reported. “This follows another post last week in which Trump also called for the Fed to lower rates, even hinting at Powell’s “termination” — something White House economic advisor Kevin Hassett said the president’s team was studying.”

Mirroring my reference to the challenges of investing with Covid, Michael Green, chief strategist of Simplify Asset Management told CNBC the following: “One of the things that is becoming very clear is the underlying tension between the Fed and the administration. We are effectively in a replay of Covid. The uncertainty has meaningfully disrupted trade …I think most people anticipate that there will be some form of stimulus that ultimately emerges to offset the effects of the tariff.”

In truth, there is a snowball effect going on where lack of positive news on tariff negotiations is mixing in with stock prices sliding, the bond market raising rates and Trump trying to KO Jerome Powell. All this explains why the greenback is falling and the Oz dollar is now up to 64.18 US cents.

Investors would be exiting capital from the US because Trump is worrying them. If you were invested in big US companies that could be negatively affected by tariffs, why wouldn’t you be thinking about either getting your money out of the stock market or at least making sure future investments are in more politically stable economies and markets.

One important aspect of deregulation has been that if individual countries behave as they like, the world can say (as Arnold Schwarzenegger once said) as they leave the related financial markets: “Hasta la vista, baby!”

That’s what’s happening now. Markets and therefore our wealth won’t turn around until Donald plays ball with what markets expect from the President of the USA. In summary, we lose in the short term, but markets will prevail. And President Trump will need a better plan than trying to sack Jerome Powell.