Trump Calls for Fed Chair Jerome Powell to Step Down: What Impact Will This Have on the Crypto market?

Trump is blaming Jerome Powell for maintaining elevated rates and increasing the interest burden on the United States. Will BTC surpass $112,000?

Yesterday, Bitcoin made a brief ascent past $112,000, revisiting the highs from May 2025. In contrast to the fresh all-time highs achieved on May 22, the rally on July 9 occurs after a period of sideways movement following the relief rally from June 23. At this rate, technical candlestick patterns appear to price floor uptrend trends. Bitcoin ▲2.20% and various top cryptos to purchase may continue to rise, influenced by developments in the United States.

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Trump Attacks Federal Reserve Chair

Yesterday, amid a fiery speech, President Donald Trump intensified his ongoing dispute with Jerome Powell, the Federal Reserve Chair.

In a widely shared video, the President labeled Powell as “low IQ” and a “very foolish person” for his refusal to reduce interest rates. The President emphasized that Powell’s position is costing the United States billions.

Trump accuses Powell and the Federal Reserve of escalating the cost of servicing the national debt, which was over $35 trillion as of September 30, 2024. In the video, the President claimed the United States has been “paying for him for years.”

With each decision not to cut rates, the United States incurs billions more in interest owed to Treasury bondholders. If rates remain unchanged, the Congressional Budget Office (CBO) anticipates that net interest payments could approach $1 trillion annually by early 2030.

The comments, which also hinted at the potential dismissal or forced resignation of the Federal Reserve Chair, seem to be energizing the market, particularly BTC.

While such outbursts are expected from Trump, a politician, they once again stir up concerns regarding the Federal Reserve’s autonomy. This isn’t the first instance of Trump expressing outrage over the central bank’s high-interest rate policies while other nations, notably in Europe, have been lowering rates.

High Interest Rates: What Lies Ahead for the Fed?

Powell and the FOMC are responsible for formulating monetary policy in the United States. Their goal is to keep inflation near the benchmark of 2% while promoting economic growth and high employment rates.

Currently, inflation appears to be stabilizing. Although the Federal Reserve had an opportunity to lower rates at the previous meeting in June 2025, they opted to maintain rates in the 4.25–4.5% range. Economists predict that Powell and the central bank will keep rates steady at the upcoming meeting on July 30.

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Lower interest rates are favorable for Bitcoin and leading Solana meme coins. If rates hodl steady until the end of July, prices might tumble, potentially wiping out recent gains.

Trump asserts that Powell is becoming “political” and intentionally hindering economic growth with the existing rates. As he remarked in the video, this inflates the costs associated with servicing the national debt.

Reduced rates would alleviate borrowing costs, bolstering Trump’s aggressive economic agenda, which controversially involves broad tariffs and tax reductions.

While lowered rates could heighten inflation, the President believes any ensuing price pressures can be managed later with rate increases if necessary.

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Effects of Tariffs on Inflation

Trump’s warning of increased tariffs on primary trading partners could inflate costs for consumers, intensifying inflationary pressures.

Experts and leading bankers, including JPMorgan’s Jamie Dimon, caution that tariffs might push U.S. inflation higher, clarifying the Federal Reserve’s hesitation in cutting rates.

Powell’s term is set to conclude in May 2026, and he has pledged not to resign. President Trump does not have the authority to dismiss him, given the independence and apolitical nature of the central bank, which operates in the nation’s best interests with a crucial mandate to balance inflation and employment.

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