Key Highlights
- The Trump administration’s focus on the Federal Reserve’s $2.5 billion renovation project has intensified discussions about a possible leadership change, pressuring Chairman Powell.
- Two potential successors to Powell criticized his leadership over the weekend.
- A new Fed chair appointed by Trump would likely align with the administration’s calls for lower interest rates.
With market conditions appearing favorable, Bitcoin rose above $120,000 for the first time, coinciding with increasing pressure on Federal Reserve Chairman Jerome Powell regarding potential dismissal or resignation.
Powell had previously enacted substantial rate cuts right before the 2024 elections but shifted to a more hawkish viewpoint post-Trump’s election, which has reportedly caused friction between them.
Additional Context
- “Frankly, it’s about breaking some heads,” said former Fed Governor Kevin Warsh on Fox News Sunday. He believes the central bank’s renovation expenditure illustrates how the Fed has strayed from its purpose, advocating for a change in leadership.
- National Economic Council Director Kevin Hasset also raised the possibility of the president’s authority to remove Powell, stating, “…but certainly if there’s cause, he does.”
- The scrutiny around Powell has escalated particularly regarding the renovation project’s costs, with some alleging he misled Congress about the expenses involved.
For the Fed’s perspective, they have provided clarifications through a new FAQ page.
Trump remarked that it would “be a great thing” for the nation if Powell left the Fed: “Jerome Powell has been very bad for our country.”
Meanwhile, speculation increases that a new chair could foster a more positive environment for the crypto community, alongside anticipated shifts in monetary policy.
