Trump Seeks to Remove Fed Chairman Jerome Powell: A New Opportunity for Crypto Markets?
In a controversial move, former President Donald Trump is seeking to remove Federal Reserve Chairman Jerome Powell through the Supreme Court. The move comes amid growing tensions between the two figures since Trump's first term as president, and could now be a major catalyst for financial markets – especially cryptocurrencies.
Trump-Powell Conflict Trigger
The conflict between Trump and Powell is not new. During his first term, Trump repeatedly criticized the Fed's refusal to cut interest rates at his request, arguing that overly hawkish monetary policy was holding back the US economy.
However, after imposing massive tariffs on many countries on "Liberation Day" on April 2, 2025, global financial markets began to plummet. US stocks fell further on rumors of a 90-day tariff delay – a news that the White House initially denied, but later confirmed, except for China. For Beijing, the new tariffs were even increased to 145%.
Cryptocurrencies were not spared from the shock. On April 7, the crypto market lost 10-20% of its value, with $888 million in liquidations in a single day.
Powell stands firm – Trump is not happy
Amid the economic turmoil, Donald Trump continues to pressure the Fed to act. While US inflation has begun to cool, Trump wants to cut interest rates to stimulate the economy and markets. But Powell remains steadfast in his policy of controlling inflation and warns against hasty reactions to rapid trade policy changes.
This has brought the conflict to a head. Trump has reportedly asked the Supreme Court to consider removing independent agency leaders – including the Fed chairman.
Powell’s Dangerous Situation
Powell is protected by a 1935 legal precedent (Humphrey’s Executor v. U.S.), which prevents the president from removing independent agency leaders without cause. However, Trump could invoke Article II of the US Constitution to initiate a change to that precedent – a risky legal move that cannot be ruled out.
If successful, Trump would be able to appoint a confidant – such as Kevin Warsh, who is seen as more “friendly” to cryptocurrencies – to replace Powell.
Will Cryptocurrencies Benefit or Risk?
The crypto market could benefit in the short term if interest rates are cut. Lower interest rates mean cheaper capital flows and increased demand for risky assets like Bitcoin. In the past, every time the Fed signaled easing, BTC prices skyrocketed.
However, changing monetary policy based on political factors has made many investors worried. Powell – although not considered an active crypto supporter – has maintained a consistent and fair stance, including opposing banks refusing to serve blockchain companies.
Trump's removal of Powell for political reasons could erode the independence of the Fed – a key factor in protecting the stability of the US economy. If this happens, markets could face unforeseen volatility, including the cryptocurrency market.
Scenario ahead
Jerome Powell's term ends in May 2026, but given the current situation, Trump may not wait that long. With legal support and determination to "pave the way" for new economic policies, he could create a major turning point in the history of the US central bank.
Will this be a boost for Bitcoin and cryptocurrencies? Or a double-edged sword for the entire financial system? The answer will depend on how the parties act in the coming months.
