A Fed Nightmare Is Suddenly Coming True Just As Bitcoin Hits Another All-Time High Price
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.
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.
- Many of the most bullish bitcoin traders and investors have, however, 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.
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."
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