President Donald Trump escalated his war of words with Federal Reserve Chair Jerome Powell on Tuesday, demanding his immediate resignation and backing congressional investigations into the central bank's leadership. The dramatic confrontation signals a potential shake-up in America's monetary policy apparatus just as crypto markets anticipate major regulatory shifts.
Speaking during a public appearance, Trump unleashed a blistering attack on Powell's tenure. "Jerome Powell should resign immediately," the president declared. "He's been whining like a baby about non-existent inflation for months. Cut interest rates, Jerome — now is the time."
The president's frustration appears rooted in Powell's cautious approach to rate cuts. Trump argued that "tariffs have had zero impact on inflation," directly contradicting Federal Reserve assessments that trade barriers could pressure consumer prices upward. This disagreement touches the heart of Trump's economic strategy, which relies heavily on tariff revenues to fund tax cut extensions.
Congressional Investigation Gains Presidential Backing
Trump's most significant move came when he explicitly endorsed legislative scrutiny of Fed leadership. "Congress should investigate Fed Chair Jerome Powell," he stated, adding that such an investigation would receive his full support. Multiple lawmakers have already begun preliminary discussions about formal hearings.
The timing proves particularly sensitive as crypto markets await clarity on digital asset regulation. Powell's Federal Reserve has maintained a notably cautious stance toward cryptocurrencies, often citing financial stability concerns. Trump's administration, by contrast, has signaled strong support for digital assets, with Truth Social recently filing for a crypto ETF holding Bitcoin, Ethereum, Solana, XRP, and Cronos.
Representative sources close to the House Financial Services Committee suggest that any Fed investigation would likely examine the central bank's approach to both traditional monetary policy and emerging digital currencies. This dual focus could reshape how America's financial system approaches blockchain technology integration.
"Too late! He's always late! But he wasn't late with Biden before the election — he was cutting rates like crazy," Trump commented, referring to Powell's pre-election monetary policy decisions.
Market Implications for Digital Assets
Trump's attacks on Powell create unique opportunities for cryptocurrency advocates. The president's criticism centers on the Fed's reluctance to cut interest rates, which traditionally benefits risk assets including digital currencies. Lower rates reduce the opportunity cost of holding non-yielding assets like Bitcoin, potentially driving institutional adoption.
The confrontation also highlights broader questions about Federal Reserve independence. If congressional investigations materialize, they could examine the central bank's regulatory approach to cryptocurrencies, potentially accelerating the approval process for digital asset ETFs and other financial products.
Several high-profile crypto figures have already begun positioning themselves for potential policy changes. With 65 crypto firms recently urging lawmakers to pass the CLARITY Act, the industry appears coordinated in its push for regulatory certainty.
Treasury Secretary Speculation Intensifies
Trump's comments included apparent support for Scott Bessent as Powell's potential replacement, though the president stopped short of formal endorsement. Bessent, a hedge fund manager with extensive Wall Street experience, has previously expressed more favorable views toward digital assets than current Fed leadership.
The speculation gains additional weight given Trump's broader economic team appointments. Commerce Secretary Howard Lutnick, who oversees trade policy, has indicated that "another 15-20 letters" regarding tariffs will be sent to trading partners over the coming days. This aggressive trade stance could further strain relations with the Federal Reserve.
Industry observers note that a leadership change at the Fed could dramatically alter cryptocurrency regulation. Powell's cautious approach has frustrated crypto advocates who argue for clearer regulatory frameworks. A more crypto-friendly Fed chair could accelerate institutional adoption and potentially support the creation of a U.S. Central Bank Digital Currency.
As Washington prepares for what many are calling "Crypto Week" starting July 14, Trump's confrontation with Powell adds another layer of complexity to an already turbulent political landscape. The outcome of any congressional investigation could reshape not just monetary policy, but America's entire approach to digital financial innovation.
