Trump’s Fed Feud: How a Political Firestorm Could Reshape Crypto and Global Markets

President Donald Trump’s public attacks on Federal Reserve Chair Jerome Powell have escalated from criticism to outright threats raising alarms about the Fed’s independence and the stability of financial markets. In a recent Truth Social rant, Trump declared Powell’s “termination cannot come fast enough,” blaming him for not slashing interest rates aggressively.

But can Trump fire Powell? The Fed chair’s term runs until May 2026, and legal precedent (Humphrey’s Executor v. United States) suggests presidents can’t remove heads of independent agencies without cause like misconduct or negligence. Powell has repeatedly stated he won’t resign, emphasizing that the Fed’s independence is “a matter of law”.

Yet, the Supreme Court is weighing a case that could upend this precedent. If Trump wins the right to fire officials at other independent agencies (like the NLRB), it might open the door to ousting Powell a scenario Senator Elizabeth Warren warns would “crash markets” by eroding investor trust in apolitical economic stewardship.

Why Trump Wants Powell Gone

Trump’s frustration stems from Powell’s reluctance to cut rates amid the president’s trade wars. The Fed has held rates steady, citing inflation risks from Trump’s sweeping tariffs including a 10% levy on all imports and 145% on Chinese goods. Powell argues these policies could “move us further away from our goals” of stable prices and maximum employment.

But Trump insists inflation is under control (it’s currently 2.4%, near the Fed’s target) and claims low rates would boost growth. Behind the scenes, Treasury Secretary Scott Bessent has cautioned that firing Powell could trigger market chaos—a risk Trump’s allies are reportedly weighing against short-term political gains.

The Dollar’s Slide and Crypto’s Wild Card

Trump’s tariffs aren’t just straining the Fed—they’re battering the U.S. dollar. The currency has dropped 9% since January, hitting a three-year low as investors flee uncertainty. Goldman Sachs predicts further declines, noting tariffs could force the dollar to weaken another 10% against the euro and yen.

A weaker dollar typically makes imports pricier for Americans, but it also raises an intriguing question: Could Bitcoin benefit? Historically, crypto thrives during currency instability, as seen in countries like Venezuela or Argentina. Analysts like ARK Invest’s Cathie Wood argue Bitcoin is a “hedge against inflation” and predict bullish long-term price targets (up to $1.5M by 2030).

Yet, Bitcoin’s price hasn’t surged yet—it’s hovered around $83Kafterpeakingat$109K in January. The lag might reflect broader market caution, but if the dollar’s reserve status erodes further, crypto could gain traction as an alternative. As BlackRock’s Larry Fink noted, “digital assets like Bitcoin” may fill the void if faith in the dollar collapses.

The Domino Effect: Markets, Consumers, and the Fed’s Legacy

The stakes extend beyond crypto. A politicized Fed could:

• Spook investors: Markets rely on the Fed’s predictability. Political interference might trigger sell-offs.

• Accelerate inflation: Tariffs + loose monetary policy could spike prices, warns Economic Security Project’s Chris Hughes [citation: Summary].

• Undermine the dollar’s reserve status: China and others are already pivoting to yuan-based trade deals.

Powell’s fate now hinges on the Supreme Court—and whether Trump’s gamble pays off. For crypto enthusiasts, the chaos might be an opportunity. For everyone else? Buckle up!

This isn’t just a bureaucratic spat. It’s a stress test for the global financial system—one where crypto could emerge as an unlikely winner. Whether you’re a trader, policymaker, or casual observer, the next few months will redefine the rules of economic power.

Subscribe to my whatsapp channel