Trump vs. Powell: Rate Showdown Looms

Trump's Pressure on the Federal Reserve: Will Interest Rates Change Amidst Economic Clashes?

The Federal Reserve's upcoming interest rate decision has sparked anticipation and speculation, with President Trump advocating for a notable reduction in borrowing costs. Economists indicate a potential conflict between the Federal Reserve and the President, as the market anticipates that the central bank will maintain current interest rates. The decision, set for Wednesday, marks Powell's inaugural response following Trump's re-election.

Analysts emphasize the importance of preserving market confidence, warning Chairman Powell of the risks of succumbing to White House influences. Presidential interference in monetary policy can yield adverse outcomes, as cautioned by Claudia Sahm, Chief Economist of New Century Advisors. Despite an easing inflationary environment allowing for a previous rate cut of 1 percentage point to a range between 4.25% and 4.5%, which remains above the Federal Reserve's target of 2%, Trump continues to push for expedited rate reductions.

Lawrence Summers warns that such government intervention in economic policies may lead to unintended consequences, affirming that the Federal Reserve is unlikely to yield to external pressures. The central bank's independence is crucial for maintaining market confidence and ensuring the stability of the economy.

Bitcoin's four-year cycle may be disrupted by Trump's new crypto executive order, according to Bitwise CIO Matt Hougan. The historical pattern suggests a major pullback in 2026, but institutional adoption, regulatory clarity, and a growing mainstream financial presence could sustain the bull market longer than expected. Bitcoin is currently trading at $102,000 with $100,000 as a support level, and is expected to reach $200,000 in 2025 amid mainstream adoption and increasing flows into spot Bitcoin ETFs.

Bitcoin bulls sought to avert fresh $100,000 retests on Jan. 29 as markets awaited the US Federal Reserve's interest rate move. Data from CoinGlass and Coinglass showed $102,000 remaining at BTC price focus into the Wall Street open. Modest volatility within a tight range saw BTC/USD dip to near the $100,000 mark into the daily close, with sellers ultimately failing to spark a deeper rout. Market participants were broadly in "wait and see"