‘Imminent' Fed Nightmare Is Suddenly Coming True As The Bitcoin Price Soars

Forbes

a day ago

07/16 update below. This post was originally published on July 15
Bitcoin has rocketed over the last week, hitting an all-time high of $123,000 per bitcoin as traders brace for a "10x" shock.
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The bitcoin price is up around 60% from its April lows, helped by U.S. president Donald Trump's support of bitcoin and crypto even as the Federal Reserve keeps interest rates on hold.
Now, as traders bet Fed interest rate cuts could boost the bitcoin price, Trump is threatening to create a Federal Reserve independence nightmare for markets.
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US Federal Reserve chair Jerome Powell has held interest rates steady—something some think may be ... More holding back the bitcoin price rally—and creating a nightmare that threatens the bank's independence.
Federal Reserve chair Jerome Powell is under fresh pressure from the White House and U.S. president Donald Trump whose continued attacks on Powell over interest rates have raised the possibility of "regime change" at the Fed.
07/16 update: U.S. congresswoman Anna Paulina Luna, who does not sit on the committee overseeing the Federal Reserve, has posted to X that Fed chair Jerome Powell's firing is "imminent," spiking bets on Polymarket that U.S. president Donald Trump will "remove" Powell this year.
"Jerome Powell is going to be fired. Firing is imminent," Luna posted without evidence, stoking fears of an independence crisis at the Fed as Trump's attacks on Powell drive calls for 'regime change.'
Last week, Trump said he wasn't planning to remove Powell, despite reports that the Trump administration is investigating the Fed's $2.5 billion renovation project as a possible route to forcing Powell to step down.
Meanwhile, JPMorgan chief executive Jamie Dimon has called Fed independence "critical" during an analyst call, with Treasury secretary Scott Bessent saying in a Bloomberg interview that Fed independence is "very important."
The Trump administration is now investigating the Fed's $2.5 billion renovation project as a possible route to forcing Powell to step down or as a reason for Trump to fire him, with Axios reporting Powell has asked the central bank's inspector general to review the project that's led to questions he may have misled Congress in his testimony regarding the renovation.
Trump has raised the possibility he could remove Powell before his term is up next year, though no one is quite sure if he has the authority to do so. National Economic Council director Kevin Hasset told ABC News the president's possible power to fire Jerome Powell is 'being looked into ... but certainly if there's cause, he does.'
"Frankly, it's about breaking some heads," former Fed governor Kevin Warsh, one of the front-runners to be named as Powell's replacement, told Fox News, adding the Fed "has lost its way" and said it was time for 'regime change.'
The odds on Trump "removing" Powell on the crypto-powered PolyMarket prediction platform have climbed in recent weeks from lows of under 10% in June to over 20% this week.
Many of the most bullish bitcoin traders and investors have predicted the bitcoin price will climb at a faster rate if or when the Fed does begin to lower interest rates, something that encourages cash to flow more quickly through the economy.
"Recent indications from president Trump that he will name a replacement for Fed chair Powell early (by October, before Powell's current term expires in May) are one such driver," Geoff Kendrick, head of digital assets research at Standard Chartered Bank, said in an emailed note.
"This would likely cause markets to price in more Fed rate cuts sooner and also increase investor concerns about Fed independence–both of which are positive for term premium."
The new Fed chair, appointed by Trump either this year or once Powell's term ends in 2026, is widely expected to be supportive of lower interest rates. The bitcoin price has repeatedly hit fresh all-time highs through 2025, silencing those who claimed its historical 13-year run to 2022 was the result of the global zero interest rate policy (ZIRP) that followed the 2008 financial crisis.
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The bitcoin price has rocketed higher, hitting a fresh all-time high in recent months.
The Fed kept interest rates on hold again last month after kicking off a reduction cycle in September that's been put on pause due to fears Trump's global trade tariffs could see a return of inflation—with critics pointing to the pre-election reduction and post-election pause as evidence of political bias.
For his part, Powell has said the expected increase in inflation as a result of Trump's so-called Liberation Day of global trade tariffs is a good reason to take a 'wait-and-see' approach to adjusting interest rates, with the market all but certain the Fed will hold rates steady again later this month.
In June, Trump renewed his attack on Powell as U.S. debt topped $37 trillion. "I don't know why the board doesn't override (Powell)," Trump posted to his Truth Social account in a lengthy message in which he branded Powell a 'moron" and heavily criticized Fed policy that he claims is costing the U.S. $1 trillion per year in interest payments. "Maybe, just maybe, I'll have to change my mind about firing him? But regardless, his term ends shortly."