tl;dr
U.S. President Donald Trump's comments about Federal Reserve Chair Jerome Powell caused volatility in the crypto market, with Bitcoin rising about 2% amid speculation Powell might be fired. Although Trump criticized Powell's performance, he publicly denied plans to remove him, contradicting reports ...
U.S. President Donald Trump’s rhetoric toward Federal Reserve Chair Jerome Powell stirred volatility in the crypto market on Wednesday, as investors speculated about the possibility of Powell being fired. Bitcoin’s price surged to as high as $119,500, later dipping to around $119,000, and currently stands at $119,650, marking a 2% increase over the past day according to CoinGecko data.
Despite Trump’s criticism of Powell’s performance, he publicly dismissed plans to remove him before the end of his term, stating, “We’re not planning on doing anything,” and “He’s doing a lousy job, but no I’m not talking about that.” This stance appeared contradictory to a Bloomberg report suggesting that Trump might soon fire Powell, citing an unnamed White House source. Additionally, Trump reportedly showed Republican lawmakers a draft letter of Powell’s firing during a meeting on crypto legislation concerns, a development confirmed by The New York Times.
Trump has persistently urged Powell to lower interest rates to alleviate the U.S. government’s debt burden, but the Federal Reserve has kept rates steady, cautiously monitoring the economic impact of Trump’s tariffs. The prospect of firing Powell would be unprecedented and its legality uncertain, with experts warning of potential market disruptions and erosion of confidence in the U.S. economy’s core institutions.
Bitcoin, as an alternative store of value to the U.S. dollar, might benefit from any challenge to Fed independence, a notion supported by some analysts alongside other assets like gold. Trump and his allies have intensified pressure on Powell, accusing him of partisan monetary policymaking and expressing concerns over the Fed’s $2.5 billion headquarters renovation plan. When asked if the renovation could justify firing Powell, Trump replied, “I think it sort of is.”
This episode mirrors Trump’s earlier efforts to recalibrate global trade via “reciprocal” tariffs, characterized by conflicting narratives within his administration. The ongoing twists in trade policy negotiations, especially with China, have shown similar inconsistencies between Trump’s public assertions and those of his cabinet members.