Trump Demands Powell Resignation Over Rate Cuts Dispute

On July 9, 2025, U.S. President Donald Trump publicly demanded the resignation of Federal Reserve Chair Jerome Powell, citing allegations of misleading Congress regarding expensive renovations to the Fed's headquarters. During a Cabinet meeting, Trump criticized Powell's leadership, asserting that he is unfit for the role and insisting that the Fed should reduce interest rates to bolster the economy. Trump also expressed dissatisfaction with Powell's comments attributing tariffs to the delay in rate cuts, which he recently postponed to August 1.

Trump's criticism of Powell is not limited to the renovation expenses. The President has been vocal about his belief that Powell's policies are hindering economic growth. He has accused Powell of keeping interest rates too high, which he claims is costing the country a significant amount of money. Powell, on the other hand, has defended his stance, arguing that Trump's tariff policies contribute to inflation, making it risky to lower interest rates prematurely.

This ongoing conflict between Trump and Powell has sparked debates about the future of U.S. monetary policy and its impact on various sectors, including the crypto market. High interest rates tend to deter investors from riskier assets like cryptocurrencies. If Powell were to cut rates, it could potentially lead to a surge in Bitcoin and other altcoins. However, according to the FedWatch Tool, there is a strong likelihood (95.3%) that the Fed will maintain its current interest rate range of 4.25%–4.50% during its meeting on July 30, 2025. A rate cut to 4.00%–4.25% is considered less likely (4.7%).

If Powell decides to cut rates, it could provide a boost to the crypto market in the short term, with analysts predicting a potential rise of 10–30% in Bitcoin prices. In the long term, a decline in interest rates to 3.75%–4.00% by 2025 could invigorate the crypto market by increasing liquidity, investor optimism, and weakening the U.S. dollar. Conversely, if inflation persists and Powell fails to lower rates further, the crypto market could stagnate or decline, mirroring the performance of traditional markets.

The potential replacement of Powell has also raised questions about the future of the Fed and its impact on the crypto market. According to prediction market Kalshi, Kevin Hassett is the leading contender with a 35% chance of becoming the next Fed Chair, followed by Christopher Waller at 23% and Kevin Warsh at 21%. These potential successors are known for their preference for lower interest rates, which aligns with Trump's vision. However, the outcome of this political drama remains uncertain and will significantly influence the trajectory of digital currencies.