President Donald Trump renewed his criticism of Federal Reserve Chair Jerome Powell on Truth Social, accusing him of being "always late" when it comes to monetary policy. Trump argued that Powell should follow the European Central Bank’s lead, which recently cut interest rates by 25 basis points, and urged the Fed to act similarly, claiming U.S. inflation has eased.
Trump went further, suggesting Powell should be removed from office, stating, "If I want him out, he'll be out of there real fast, believe me," during a media Q&A at the Oval Office. The remarks have stirred concerns about potential market disruptions if Trump were to take action against Powell.
Senator Elizabeth Warren warned that granting a president the power to fire the Fed chair could destabilize financial markets. Speaking at the New York Stock Exchange, she said, “If Chairman Powell can be fired by the president of the United States, it will crash markets in the United States,” adding that financial systems rely on independence from political influence.
Despite Trump’s verbal attacks, the cryptocurrency market remained largely unaffected. Bitcoin showed resilience, holding steady just above $84,000.
Tim Delhaes, co-founder of Grindery, told FXStreet that markets are driven more by sentiment than policy shifts. He noted that Trump's continued pressure on the Fed, combined with the ECB's recent rate cut, might push investors toward alternative assets like gold, bonds, and Bitcoin.
Mike Cahill, CEO of Douro, said the ECB’s rate cut and the political tension in the U.S. signal that policy changes may be on the horizon. However, he cautioned against over-relying on rate cuts as a fix. “They’re not a silver bullet,” he said. “We need to focus on building infrastructure for a next-generation financial system.”
Douglas Colkitt, Initial Fogo Contributor, warned that political interference in rate decisions creates uncertainty. “This highlights the long-term need for resilient financial infrastructure and regulation that isn’t swayed by politics or election cycles,” he said.
Fideum CEO Anastasija Plotnikova echoed this sentiment, noting that Trump lacks the authority to dismiss Powell and that such rhetoric only destabilizes markets. She added that the Fed remains engaged and transparent, citing sticky inflation and trade tensions as reasons for holding off on any immediate rate cuts. "I don't expect a rate move until the 90-day tariff negotiations are concluded," she added.
Bitcoin’s current consolidation phase may persist due to high interest rates and ongoing tariff concerns. Since Trump’s tariff announcement in February, Bitcoin has dropped nearly 18%, from $102,000 to around $84,500. This downturn has led to $5.12 billion in outflows from U.S. spot Bitcoin ETFs, according to SoSoValue data.
