- Trump threatens to fire Fed Chair Powell over refusal to cut interest rates amid tariff concerns.
- Powell warns Trump’s tariffs risk stagflation; inflation holds at 2.4% despite high rates.
- Crypto traders stay cautious as political tension stalls Bitcoin near $83K resistance.
The U.S. President Donald Trump issued a direct threat to Jerome Powell, Federal Reserve Chair on April 17, suggesting he could be swiftly removed from his post. The comments came after Powell warned that Trump’s newly proposed trade tariffs may cause stagflation—rising prices combined with economic stagnation.
Speaking at a White House event, Trump told reporters he was not happy with Powell and said if he wanted him out he would be out quickly. Trump on his social media platform Truth Social called the Fed Chair ‘Too Late Jerome’ and said Powell’s firing can’t happen fast enough, while urging for immediate interest rate cuts.
Powell Resists Rate Cuts as Inflation Lingers
Trump and some market participants have been critical about Powell’s decision to leave interest rates at 4.5%. The Fed chair argued that Trump’s aggressive tariff policy, most notably the designs on new duties on imports from China, could trigger the ‘stagflation’ — which eats away growth and pushes up consumer prices.
In an effort to control inflation, which is 2.4% as measured by the Consumer Price Index, the Federal Reserve’s benchmark interest rate remains high. This figure remains above the Fed’s 2% target. According to the Bureau of Labor Statistics, some essential categories, such as food, are experiencing even higher price increases
Despite the criticism, Powell has not signaled an imminent rate cut. The Fed generally lowers interest rates to support economic activity during downturns and increases them to control inflation. Powell appears to be holding his ground, arguing that premature rate cuts could undermine the efforts by central bank’s to manage inflation expectations.
Despite Trump’s public calls to remove Powell, analysts and prediction markets say the odds of that action are actually low. The Federal Reserve is an independent body, and replacing its chairman is a complicated process outside of the official term renewal.
Crypto Traders React to Political Uncertainty
The ongoing dispute has caught the attention of crypto market participants, who were anticipating a rate cut to boost risk appetite. With Powell standing firm and political uncertainty increasing, Bitcoin and other cryptocurrencies have shown limited movement. The global crypto market cap stands at $2.75 trillion, while Bitcoin is hovering above $83,000, unable to break resistance at $86,000.
Trump’s statements on U.S.–China relations are also influencing Crypto sentiment. He claimed that Chinese officials have shown interest in negotiating a new trade deal, though Beijing has not confirmed any formal talks. The narrative appears aimed at reassuring investors, but market analysts caution that sentiment remains highly sensitive to political shifts.
According to the blockchain intelligence firm Santiment, retail traders were closely watching the political developments. The firm added that changes in Trump’s behavior could lead to real shifts in retail sentiment quickly. According to a Santiment analyst, the retail crowd’s sentiment on crypto continued to remain relevant, but acknowledged that most would admit their bullish or bearish stories could be short lived given the turnable, abrupt shift of Trump.
