U.S. President Donald Trump and Jerome Powell find themselves at a crossroads due to their differences in tariff policy. Trump has publicly urged the Federal Reserve Chairman to lower interest rates and has even criticized him for delays in doing so. Reports suggest that Trump plans to impose a 25% tariff on Apple if iPhones are not manufactured in the United States. Just today, Trump proposed a 50% tariff on the European Union, which shook the markets.
Reflecting on these events, Goolsbee stated that the central bank is more cautious with interest rate decisions due to the uncertainty surrounding Trump's tariff policies. He noted:
"Everything is always on the table. But I think the bar for me is a bit higher to act in either direction while we wait to have more clarity. In the long run, if they are implementing tariffs with a stagflationary impact… then that is the worst situation for the central bank."
Driven by Trump's tariff announcement, the cryptocurrency market is experiencing a downturn, with a total market capitalization that has dropped by 0.97% to $3.47 trillion. If the Federal Reserve decides to keep the interest rate unchanged for a couple of months, it could have a negative impact on the cryptocurrency market. However, if the bank lowers rates during this period, it could provide a boost to the cryptocurrency market.