2025-12-30 03:27:18

U.S. President Trump recently spoke out again on Federal Reserve Chair Powell, threatening to fire and sue him at any time, while also announcing that the next Fed chair will be announced in January. These remarks instantly became a hot topic in the market, but from an operational perspective, the situation is far from as simple as it appears.

Legally, the independence of the Federal Reserve is protected by the Constitution, and the President does not have the authority to dismiss the Chair at will. To initiate removal, there must be proof of "serious misconduct" as defined by law, and the issue of building renovations mentioned by Trump is far from meeting this threshold. In fact, Trump considered this move as early as July last year, but ultimately backed down due to concerns about causing severe volatility in the stock, bond, and currency markets. The risk of reopening old issues is even greater now.

From the perspective of term length, Powell's term as Chair extends until May 2026, with five months remaining. He has already made it clear that he will not resign early. For Trump, nominating a successor in January and completing the transition by next May is a more stable approach than forcing a dismissal. Currently, popular candidates in the market include Kevin Hasset and Kevin Walsh.

Ultimately, Trump's tough stance points to a core goal: to force the Fed to accelerate rate cuts. The new administration needs a loose financial environment to stimulate economic growth, while Powell insists on prioritizing inflation control and remains cautious about rate cuts. Through public pressure, Trump aims to push Powell to speed up rate reductions and also signals to the market that future Fed policies will be more aligned with economic stimulus needs.

In the near term, Powell will remain in the chair until the end of his term, with no change in monetary policy autonomy. In the medium term, Trump will complete a new round of personnel changes at the Fed, and the pace of rate cuts may become a focal point of the game between the two sides. These developments will directly impact the global liquidity environment and subsequently influence the performance of the crypto market.

View Original

This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.

15 Likes

Reward
15
7
Repost
Share

Comment

0/400

DeFiVeteran

· 9h ago

Basically, it's a political show; Trump can't really influence Powell. The real goal is to force a rate cut to give the economy a lifeline. Now the crypto market has some drama; liquidity easing is our reassurance. Powell won't be scared; the Constitution is protecting him. Retail investors are still tangled up in their fight, but we should focus on the Fed's policy shift. Once the rate cut expectation emerges, crypto prices react immediately. Let's wait and see who the new chair will be next year; maybe they'll be easier to handle? Five months can't change anything; the long-term view is what matters.

View OriginalReply0

NewDAOdreamer

· 9h ago

In plain terms, Trump is just acting; when it comes to real firepower, it's all about rate cuts. That's what the crypto market truly cares about.

View OriginalReply0

ChainSauceMaster

· 9h ago

Trump is once again making tough statements, saying that nice words are pressure, and harsh words are just acting... Powell is securely in place, but the key is the next Federal Reserve chair candidate, which directly affects the pace of future rate cuts. For the crypto world, that means money. It's really about competing for dominance over the financial environment. If rate cuts come quickly, the market will take off; if they come slowly... you all know what will happen. The Constitution's protection of the Federal Reserve's independence sounds good, but in the face of interests, all rules are just clouds. Let's wait and see the list of candidates in January; the real drama is just beginning.

View OriginalReply0

not_your_keys

· 9h ago

Haha, Trump is at it again. He talks tough but he really can't move Powell. He just wants to cut interest rates, putting pressure openly. Changing people in five months, this chess game has actually been set up long ago. Liquidity loosening is the only chance for crypto, let's wait and see. Powell still has to defend the inflation front, these two will probably bicker until May. Honestly, it's all about the money. Economic stimulus depends on the Fed flooding the market with liquidity. Trump is really clever, first scaring the market, then replacing with a compliant person, and it's all over.

View OriginalReply0

ForkItAllDay

· 9h ago

Basically, it's a psychological game that can't be stopped. Expectation of rate cuts is driving the market up. --- Trump is again hinting at it, but legally he can't really influence Powell. --- The real situation: rate cuts are the main point, everything else is noise. --- Got it, the core idea is to force the Federal Reserve to loosen monetary policy, so that our crypto holdings can benefit. --- Last year, I considered this move but decided against it. Revisiting old issues now is just bluffing. --- In five months, there will be new leadership. Instead of forcing it, it's smarter to wait for the transition. --- The expectation of loose liquidity has been set, now it depends on how crypto markets perform. --- Sounds good, but ultimately, rate cuts are what matter; everything else is secondary. --- This move clearly points to "easy money," which is actually a positive signal for us.

View OriginalReply0

CryptoPhoenix

· 9h ago

Remember, everyone, this is the true face of the capital market — it's all a show. Behind the surface threats, it's actually a battle of interests. What we need to do is seize the opportunity of loose liquidity; the bottom range is coming soon. --- With such strong expectations of rate cuts, I don't believe the crypto market will miss this wave of opportunity. After such a long bear market, it's finally our turn, right? --- Don't be scared by Trump's remarks. This move is actually to promote easing and environmental protection. The law of conservation of energy tells me that the bottoming out moment is near. --- If Powell holds out until May next year, then the pace of rate cuts before that is the key. The crypto circle has been waiting for this. --- Veterans who experienced the 2018 halving tell you that this market volatility is all about building momentum. The darkest hour is always before the dawn of rebirth. --- When liquidity loosens, where will the money flow? The US stock market? Or our crypto assets? This is the real opportunity. --- Once again, being taught by macroeconomic conditions, but the phoenix will always find its moment to take off. Be patient and wait.

View OriginalReply0

IronHeadMiner

· 9h ago

It's all talk; the real show is still to come.

View OriginalReply0