Trump Says He Never Plans to Fire Jerome Powell! Market Sentiment Becomes Mixed

U.S. President Donald Trump has officially dismissed rumors of plans to remove Federal Reserve Chair Jerome Powell, stating he has “never had a plan to fire Powell.” The statement, issued during a press briefing, appeared to be an effort to reassure financial markets following days of volatility sparked by the president’s earlier criticisms of Powell's handling of interest rates.

Trump's public comments aimed to cool speculation after he referred to Powell as a “major loser” on April 21 via his social media platform, Truth Social. 

In that post, Trump urged the Federal Reserve to slash interest rates immediately, arguing that inflation was no longer a significant concern and that delaying rate cuts could hinder economic growth.

The president’s latest clarification comes at a pivotal moment for global markets, which are watching the Federal Reserve’s next moves closely as inflation data remains mixed and economic uncertainty continues to weigh on investor confidence.

Political Pressure Meets Monetary Policy

While Trump's reassurance may temporarily calm fears, the situation underscores an ongoing tension between political figures and the traditionally independent Federal Reserve. 

Powell, who was appointed by Trump in 2018, has faced criticism from both political aisles during his tenure, though he has largely maintained the Fed’s policy of independence from the White House.

There were recent reports suggesting that Trump's team had explored legal options for potentially removing Powell before the end of his term in May 2026. 

However, legal experts widely agree that a U.S. president cannot dismiss the Fed chair without just cause—a safeguard designed to protect monetary policy from political manipulation.

The market had begun to price in the possibility of further interference in the Fed’s decision-making process, which contributed to a mixed reaction in traditional and digital assets.

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Bitcoin Surges Amid Fed Drama

Interestingly, Bitcoin (BTC) saw a notable boost amid the Powell-related drama, rising over 4% on the day Trump made his inflammatory remarks. The cryptocurrency briefly surged past $91,000, a move that many analysts linked to investors seeking refuge in decentralized assets during times of political and monetary instability.

Decentralized cryptocurrencies like Bitcoin are often perceived as hedges against traditional financial systems. As they are not governed by central banks or influenced by political figures, they can benefit from uncertainty in traditional finance. 

The recent market reaction is reminiscent of similar surges in BTC during previous macroeconomic tensions, such as during the U.S. banking crisis in early 2023.

According to data from CoinShares, digital asset investment products saw $130 million in inflows last week, with Bitcoin representing the majority share. 

The current climate of policy uncertainty may continue to drive institutional and retail interest in cryptocurrencies as an alternative asset class.

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Market Reaction and Investor Sentiment

Despite Trump’s walk-back, investor sentiment remains divided. While equity markets initially rebounded on his reassurances, bond yields and inflation expectations tell a more complex story. The yield on the U.S. 10-year Treasury note held steady around 4.2%, reflecting continued caution in the bond market.

Meanwhile, the CME FedWatch Tool shows that market participants are still pricing in the possibility of a rate cut as early as June 2025, despite the Fed’s more conservative tone. Investors are betting that persistent weakness in certain economic sectors and declining inflation metrics will eventually push the Fed to ease monetary policy.

However, Powell and the Federal Open Market Committee (FOMC) have remained cautious, emphasizing that inflation, while moderating, is still above the central bank's 2% target. A premature rate cut could risk reaccelerating price increases, which is why many economists argue for a “wait-and-see” approach.

Broader Implications for Crypto and Finance

The interplay between political rhetoric and monetary policy is nothing new, but it has taken on renewed significance in a post-pandemic, inflation-sensitive environment. 

For Bitcoin and other cryptocurrencies, the scenario reaffirms their appeal as politically neutral financial instruments.

As central banks around the world consider tightening or loosening monetary conditions, digital assets offer investors an alternative that is not swayed by elections, appointments, or fiscal policy decisions.

Moreover, the increasing correlation between macroeconomic policy decisions and digital asset market performance highlights the need for crypto investors to stay informed on geopolitical developments.

It also suggests that future gains in cryptocurrencies may not solely be driven by technological adoption but also by global economic sentiment.

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Conclusion: Stability or Continued Uncertainty?

President Trump’s insistence that he does not plan to fire Jerome Powell may offer temporary relief to market participants concerned about the politicization of the Federal Reserve. However, the ongoing tension between the executive branch and the central bank has already impacted market dynamics—particularly in the cryptocurrency sector.

For now, the Fed’s credibility remains intact, but the episode serves as a reminder of the fragile balance between politics and economics. 

Whether Bitcoin's recent rally marks the beginning of a longer-term decoupling from traditional markets remains to be seen, but one thing is clear: investors are watching both Washington and Wall Street more closely than ever.

FAQs

Why did Bitcoin rise after Trump's comments about Powell?

Bitcoin surged because investors saw the drama around the Federal Reserve as a reason to shift toward decentralized, politically neutral assets.

Can a U.S. president fire the Federal Reserve chair?

Legally, a president cannot remove the Fed chair without cause, ensuring the central bank remains independent from political influence.

What does the Fed's independence mean for the markets?

A politically independent Fed is seen as essential for stable monetary policy, helping build investor confidence and reduce long-term risk.

Will market volatility continue due to political pressure on the Fed?

If political rhetoric continues to influence expectations about interest rates, markets—especially crypto—could remain volatile in response.

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