Tensions between former President Donald Trump and Federal Reserve Chair Jerome Powell are escalating once again, raising concerns across both traditional financial markets and the crypto sector.
Trump Targets Powell Over Interest Rates and Tariffs
Following Powell’s warnings that Trump’s renewed trade tariffs—especially those targeting China—could trigger serious economic risks, Trump lashed out publicly. He criticized Powell for failing to cut interest rates, calling him “Too Late Jerome” and even suggesting his removal might be imminent.
“If I want him out, he’ll be out of there real fast, believe me,” Trump told reporters at a White House event on April 17.
On his social media platform, Truth Social, Trump added:
“Powell’s termination cannot come fast enough… He should have lowered rates long ago like the ECB.”
Trump’s remarks have once again stirred controversy by challenging the Federal Reserve’s independence—something that could have ripple effects across global markets.
Fed Holds Rates Steady Despite Political Pressure
Despite mounting political and market pressure, Powell and the Fed kept interest rates unchanged at 4.5% this week. The central bank pointed to lingering inflation, currently at 2.4%, as justification—still above the Fed’s 2% target. Key categories like food remain elevated, according to data from the Bureau of Labor Statistics.
Powell warned that the introduction of new tariffs may increase the risk of stagflation—a combination of slowing growth and rising prices, which complicates monetary policy decisions.
Crypto Traders Watching Closely as FOMO Builds
For crypto traders, the Fed’s stance was disappointing. Many were hoping a rate cut could trigger a FOMO-driven rally, as looser monetary policy tends to funnel capital into risk assets like Bitcoin and Ethereum.
While Powell remained firm, Trump offered a glimmer of optimism, hinting that a trade deal with China could be “very good” and that Beijing had shown signs of willingness to negotiate. However, Chinese officials have not confirmed any new talks, leaving market sentiment in limbo.
According to analysts at Santiment, crypto traders are highly sensitive to these developments, and Trump’s Fed threat is adding a layer of unpredictability. If Powell were to be removed—or if the rhetoric escalates—market volatility could surge, potentially setting off a wave of FOMO buying in the crypto space.
Low Odds, High Impact
While prediction markets still consider Powell’s dismissal unlikely, the mere discussion of such a move injects uncertainty. For now, both Wall Street and crypto markets remain on edge, watching closely as political drama and monetary policy collide.
