tl;dr
Federal Reserve Chair Jerome Powell responded to President Trump's criticisms by stating that interest rate cuts would have occurred earlier if not for Trump's tariff policies. Powell resisted Trump's demands for rate cuts, warning of inflation risks amid economic volatility. Trump's inconsistent ta...
Federal Reserve chair Jerome Powell responded firmly to President Donald Trump’s criticisms on Tuesday, stating he would have lowered interest rates by now if not for the president’s tariff policies. Speaking at a European Central Bank forum in Portugal, Powell agreed that without Trump’s tumultuous policy shifts, interest rate changes would have occurred earlier. Despite Trump’s repeated demands for rate cuts—and his recent harsh remarks labeling Powell a “stubborn mule” and a “stupid person”—Powell has resisted, warning that lowering rates amid economic volatility risks sparking inflation.
Trump’s inconsistent stance on tariffs against key trading partners has prompted the Federal Reserve to adopt a cautious “wait and see” approach since Trump’s January return to the White House. This dynamic has rippled into the cryptocurrency market, where top currencies like Bitcoin increasingly track interest rates and broader macroeconomic indicators. Recent tensions between Powell and Trump have contributed to dips in Bitcoin and other crypto asset prices.
Meanwhile, the U.S. Senate narrowly approved President Trump’s expansive reconciliation bill, colloquially called the “One Big, Beautiful Bill,” but the legislation notably omitted key cryptocurrency tax exemptions advocated by industry and pro-crypto senators. Efforts to insert amendments benefiting crypto stakers, miners, and holders of crypto assets fell short during intense last-minute negotiations.
Despite the political noise, Powell’s remarks on Tuesday had little immediate effect on Bitcoin, which declined by just 1.3% to around $105,859. The Fed chair also voiced support for establishing a federal and state regulatory framework for stablecoins, recognizing their growing presence. While Powell’s stance on crypto regulation remains cautious, he acknowledged the sector’s rising importance in financial markets and noted a shift in Wall Street’s tone toward the industry, anticipating increased activity over time.