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Vignesh S G
Vignesh S G
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Reviewed by:
Qadir AK
Reviewed
Qadir Ak is the founder of Coinpedia. He has over a decade of experience writing about technology and has been covering the blockchain and cryptocurrency space since 2010. He has also interviewed a few prominent experts within the cryptocurrency space.
- Jun 28, 2025 09:55 UTC
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Jerome Powell to Resign? Trump Eyes New Fed Leadership Amid Rate Clash
Trump pressures Fed Chair Powell for rate cuts to boost growth, but rising inflation and strong jobs data keep the Fed on hold for now.
Crypto markets eye potential rally as Trump’s push for lower rates and possible Fed leadership change signal future liquidity boost.
US President Donald Trump is frustrated with Federal Reserve Chairman Jerome Powell’s resistance to cutting interest rates, and the impact could ripple through the entire financial and crypto markets.
Why Is Trump Pushing for Interest Rate Cuts?
Since returning to the office in January 2025, President Trump has repeatedly called on the Fed to slash interest rates, arguing that:
- Lower rates will stimulate economic growth
- Cheaper borrowing can boost business investments and job creation
- The US needs competitive rates in line with other major economies
But Fed Chair Jerome Powell isn’t budging. The central bank has taken a “wait-before-act” stance despite mounting political pressure.
Fed Holds Steady Despite Trump’s Demands
The current federal interest rate stands at 4.25%-4.50%, and no cuts have been made since December 2024.
Why the delay?
- Inflation is creeping back up: May 2025 saw the annual inflation rate rise to 2.4%, breaking a four-month downtrend.
- Labour market remains strong: Jobless claims dropped from 246K to 236K, signaling economic resilience.
The Fed argues that rate cuts right now could overheat the economy and fuel inflation, risking long-term instability.
Will Trump Replace Jerome Powell?
President Trump cannot directly fire the Fed Chair, whose term ends in May 2026, but he’s already publicly demanded Powell’s resignation.
Kevin Warsh, a former Fed governor and known policy dove, is rumored to be Trump’s preferred replacement for someone more aligned with his views on rate cuts.
A change in leadership could reshape Fed policy, possibly triggering major financial shifts.
What It Means for the Crypto Market
Trump’s push for lower interest rates could turn bullish for crypto. Here’s why:
- Lower rates = cheaper money: This can drive more capital into risk-on assets like Bitcoin and altcoins
- If inflation spikes, Bitcoin could act as a hedge, strengthening its narrative as digital gold
- A dovish Fed could increase liquidity, pushing crypto prices higher
However, the power struggle between Trump and the Fed may also lead to short-term volatility and investor uncertainty.
Final Take: Political Drama, Market Opportunity?
Trump’s aggressive push for rate cuts and potential reshaping of the Federal Reserve could create the perfect setup for a crypto rally, but not without turbulence.If Powell stays firm, rate cuts may come slowly. But if Trump replaces him with someone more dovish, expect faster policy shifts and possibly a surge in crypto investor confidence.
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FAQs
Cutting rates now risks reigniting inflation, as the May 2025 annual rate rose to 2.4% and the labor market remains strong (jobless claims dropped). The Fed fears overheating the economy and jeopardizing long-term stability.
Cutting rates too soon or aggressively could lead to a resurgence of inflation, erode savers’ returns, encourage excessive risk-taking in markets (like real estate), and potentially weaken the national currency, making imports more expensive.
Interest rate cuts generally benefit crypto prices by increasing market liquidity, making borrowing cheaper, and prompting investors to move capital into “risk-on” assets like Bitcoin and altcoins, which offer potentially higher returns than bonds.
The U.S. Fed is holding rates steady (4.25%-4.50%), while central banks like the ECB and Bank of Canada have been cutting theirs. Trump views this divergence as a disadvantage, arguing it makes U.S. exports less competitive and complicates his trade goals.
Yes 
No 
