President Donald Trump has abandoned plans to fire Fed Chair Jerome Powell following his recent comments calling for lower interest rates. Trump’s previous hints at a potential dismissal of Powell have been set aside, with the president now expressing no intention of firing the Fed Chair. Despite Trump’s previous criticism and labeling of Powell as a “loser,” he has now backtracked on his stance and Powell is likely to see out his tenure as Fed Chair.
Powell, on the other hand, has maintained a firm stance amidst the speculation surrounding his potential removal. He argues that the US president does not have the legal authority to dismiss a Fed Chair, sparking a debate on the legalities of such an action. US traders are also betting against Powell’s removal on Polymarket, indicating a belief that he will remain in his position despite Trump’s previous threats.
While Trump has abandoned plans to fire Powell, he has increased pressure on the Fed Chair to lower interest rates. Trump urged Powell to be more flexible in his approach and lower interest rates, citing a slowing economy and the need for decisive action in the midst of a global tariff war. Trump’s calls for lower rates have been met with reluctance from Powell, who emphasizes the importance of proceeding with caution amidst uncertain trade policies.
If the Federal Reserve ultimately yields to Trump’s demands and lowers interest rates, it could have a positive impact on the cryptocurrency market. Lower interest rates are expected to trigger a rally in risk assets like Bitcoin, while a weaker USD could make cryptocurrencies more attractive to investors. In response to Trump’s criticism and the shelving of dismissal plans, crypto prices have seen a rise, with Bitcoin trading at higher levels.
Overall, the dynamics between President Trump and Fed Chair Powell are complex, with Trump’s initial threats of dismissal giving way to calls for lower interest rates. Powell, meanwhile, is standing his ground and emphasizing the importance of caution in monetary policy decisions. The outcome of this back-and-forth between the two figures could have significant implications for the economy and the cryptocurrency market moving forward.
