Donald Trump reaffirms his desire to regain control over US monetary policy. In his sights: Jerome Powell, Chairman of the Federal Reserve, whom he is considering dismissing. This stance is worrying Wall Street and cryptocurrency proponents.
Fed independence in question
- A long-standing conflict: Trump regularly clashed with Powell during his presidency, criticizing his interest rate management and calling for a more accommodative monetary policy.
- A controversial dismissal: Although the US Constitution protects the Fed’s independence, some legal experts believe that a president could attempt to invoke legal grounds to justify early dismissal.
Markets on alert
- Monetary uncertainty: Such a decision would set an unprecedented precedent and fuel fears of politicization of the US central bank. This could erode investor confidence in macroeconomic stability.
- Expected Reactions: Safe-haven assets like gold, and potentially Bitcoin, could benefit from renewed interest in the event of an institutional crisis or prolonged doubt about the direction of monetary policy.
What does this mean for crypto?
What this means:
- A weakened or politicized Fed could favor inflationary policies, reinforcing Bitcoin’s appeal as an alternative store of value.
- Monetary or institutional instability in the United States could accelerate de-dollarization in certain crypto ecosystems.
Persistent Risks:
- Direct intervention in the Fed could destabilize bond markets and trigger a flight to safety, to the detriment of more speculative assets.
- A prolonged environment of uncertainty could dissuade institutional investors from increasing their positions in cryptocurrencies.
Conclusion
Donald Trump’s threat to fire Jerome Powell is not just a political issue: it sends a strong signal to the markets about the future direction of US monetary policy. If it were to materialize, this maneuver could disrupt the economic balance while redefining Bitcoin’s role as a safe haven asset in the face of declining confidence in traditional institutions. With less than seven months until the presidential election, uncertainty reigns, and crypto investors, more than ever, are scrutinizing the forces of American monetary power.
