Donald Trump Ditches Plan To Fire Fed Chair Jerome Powell Amid Calls For Rate Cuts
Highlights
- US President Donald Trump has ruled out firing Jerome Powell in the near future.
- Trump is urging the Fed Chair to reconsider his stance on lowering interest rates.
- Interest rate cuts are expected to send cryptocurrency prices spiking to new levels.
US President Donald Trump is cranking up the pressure for Fed Chair Jerome Powell to lower interest rates, but questions of a dismissal are out the window. President Trump’s latest stance is a 360-degree change from his previous posturing, hinting at a dismissal of the Fed Chair.
Donald Trump Abandons Plans To Fire Jerome Powell
According to a Bloomberg report, President Donald Trump has abandoned plans to terminate Jerome Powell’s appointment as Fed Chair. Trump disclosed in a recent speech that he has “no intention of firing” Jerome Powell despite the refusal to lower interest rates.
Trump’s latest comments come on the heels of a previous statement hinting at potential dismissal for the Fed Chair. At the time, Donald Trump disclosed that the Fed Chair’s “termination cannot come fast enough” after tagging Powell a loser.
However, barely a week following the comments, Trump is making a U-turn that will see Jerome Powell see out his tenure. Despite previous statements hinting at a dismissal, US traders are betting against Powell’s removal on Polymarket.
On the other hand, Powell has maintained a stoic stance amid chatter around his potential removal as Fed Chair. Powell argues that the US president is not permitted by law to dismiss a Fed Chair, a claim that has since generated a flurry of legal debate.
Trump Increases Calls For Lower Rates
While Trump has set aside plans to dismiss Powell, the US President seized the moment to call for interest rate cuts. Donald Trump urged the Fed Chair to be flexible in his stance during the swearing-in of new SEC Chair Paul Atkins.
“I would like to see him be a little more active in terms of his idea to lower interest rates,” said Trump. “It is a perfect time to lower interest rates.”
Trump has warned of a slowing economy if the Fed refuses to cut interest rates. According to Donald Trump, the EU has cut interest rates seven times while Powell is yet to act amid a brewing global tariff war.
While the Fed cut interest rates three times in 2024, Jerome Powell is dragging his feet over the matter, citing the need to proceed with caution in the face of Trump’s uncertain trade policies.
If the Federal Reserve yields to Trump’s demands, Bitcoin and other cryptocurrencies are tipped to rally. Lower interest rates will trigger an inflow of capital into risk assets like Bitcoin, while a weak USD will make cryptocurrencies an attractive alternative.
Previously, the cryptocurrency market has rallied in the wake of Donald Trump’s criticism of Jerome Powell. Following the shelving of dismissal plans, crypto prices are in the green with Bitcoin trading as high as $93,000.
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