According to economist Alex Krüger, the Bitcoin market has not yet fully reflected the expectation that the U.S. Federal Reserve (Fed) may soon shift to a more accommodative stance – a key factor that still depends on who President Donald Trump will choose to replace Chair Jerome Powell.
According to Krüger, Bitcoin traders are anticipating the first interest rate cut of the year expected to occur in September, as an important catalyst that creates a more favorable environment for the market. If a 'moderate' candidate is nominated by Trump, BTC prices could even surge further.
The market is looking towards the possibility of an interest rate cut in September.
I am confident that the current cycle is not over yet, as I expect changes at the Fed to pave the way for much more accommodative monetary policy,” Krüger shared on X on Monday.
He emphasized: 'That will be immediately reflected in the price when Trump announces the candidate to replace Powell.' Powell's term will end in May 2026 and Trump has already put forward several potential names for this position.
The Fed's monetary policy plays a crucial role for Bitcoin, as it directly affects interest rates, market sentiment, and investors' decisions between taking risks or seeking safe assets.
According to CNBC, the Trump administration is currently considering 11 potential candidates to replace Fed Chair Jerome Powell. Among the new names added to the list are David Zervos – Chief Market Strategist at Jefferies, Rick Rieder – Global Head of Fixed Income at BlackRock, along with former Fed Governor Larry Lindsey.
Several other sources revealed that Trump has narrowed the list down to 3-4 strong candidates and may announce his successor to Powell sooner than expected.
The relationship between Trump and Powell has been tense since he took office in January, with the President continuously criticizing the Fed for hesitating to cut interest rates, even publicly calling out Powell several times.
The relationship between Trump and Powell continues to escalate in tension.
On April 17, Trump stated: 'The firing of Powell cannot happen fast enough!' Shortly after, Florida Senator Rick Scott expressed support, emphasizing: 'It's time for the Fed to have new leadership.'
Economist Alex Krüger forecasts that the Fed will cut interest rates at the meeting on September 17 — a view widely shared by the market, with 83.9% of investors believing this move will happen, according to data from CME's FedWatch Tool.
Meanwhile, on Friday, David Duong – Global Research Director at Coinbase Institutional – noted that there is a huge amount of retail capital still 'on the sidelines' in money market funds and that the Fed's easing policy could trigger a return of retail money to the market in the medium term.