The rift between President Donald Trump and Federal Reserve Chair Jerome Powell is making headlines again, raising high-stakes questions for global investors—especially those with interests in cryptocurrency. Since appointing Powell in 2017, Trump has consistently criticized the Fed chair’s reluctance to slash interest rates, making Powell a frequent target in the president’s push for a looser monetary policy.
As of July 2025, President Trump continues to publicly deny intentions to fire Powell, remarking, “I think it’s highly unlikely, unless he has to leave for fraud.” However, persistent rumors and reports to the contrary have nevertheless been enough to send jitters through financial markets. The mere prospect of abrupt leadership change at the world’s most influential central bank has both Wall Street and the digital asset ecosystem on edge.
The Ripple Effect: Markets React to Uncertainty
It takes little more than whispers of Powell’s possible dismissal to spur volatile market moves. Recent reports on this front have already shaken markets: U.S. two-year Treasury yields dove sharply, reflecting investor anxiety and shifting risk perceptions. For crypto, notorious for its volatility and hypersensitivity to macro news, the stakes are even higher.
Donald Trump’s November 2024 re-election brought a period of both optimism and unease for the crypto sector, as digital asset prices surged in anticipation of a more business-friendly regulatory environment. Yet, history shows sudden changes at the Fed—especially ones as dramatic as firing a sitting chair—inject another layer of unpredictability. In times of turmoil, some investors flock to cryptocurrencies as “digital gold,” hoping to escape traditional asset instability. Others, however, sell off crypto amid fears of a market-wide meltdown.
How Would a Trump-Appointed Fed Chair Affect Policy?
Powell’s current stance has been measured, advocating for cautious rate policy and a pragmatic approach toward digital asset regulation. Trump, by contrast, has been vocal about slashing rates by up to three percentage points from current levels (4.25%-4.5%). A new Fed chair aligned with Trump could make these steep cuts a reality, unleashing a wave of economic stimulus.
This is good news for high-risk, high-reward assets. With lower yields on Treasuries and savings accounts, investors are more likely seek alternatives such as Bitcoin, Ethereum, and other cryptocurrencies. The pattern is well-established: cheap money often finds its way into growth and speculative assets, sending prices upward. In the short term, crypto could see another major bull run.
On the regulatory front, Powell’s ouster would likely shift the tone on digital asset rules. While current Fed leadership has walked a careful line—publicly acknowledging the potential future of stablecoins but upholding the need for regulatory clarity—a Trump-aligned Fed could tip the balance toward deregulation. In fact, the Federal Reserve recently withdrew certain banking guidelines on crypto and dollar tokens, a move that may be just the beginning. Looser rules could spur an influx of institutional participation as longstanding barriers begin to fall.
iXDeep: Analysis of Market Implications for Forex & Crypto
As always, iXbroker looks beyond the headlines to explore the cascading effects of macro-political moves.
In the Forex market, the dismissal of Powell could result in immediate dollar volatility. Typically, uncertainty at the Federal Reserve leads to gyrations in major currency pairs like EUR/USD and USD/JPY, especially as traders adjust to new policy expectations. Should Trump succeed in replacing Powell with a chairperson intent on sharp rate cuts, expect further dollar weakness—potentially strengthening high-yielding or risk-on currencies, and emboldening speculation across emerging markets.
For cryptocurrency, both the initial uncertainty and potential for aggressive rate cuts are likely to act as fuel for price surges. Bitcoin and other major crypto assets tend to attract flows during periods of fiat currency instability or falling real yields. Yet, while easier monetary policy might bring a short-term rally, long-run sustainability depends on whether institutional adoption and regulatory frameworks advance in parallel.
For multi-asset traders on iXbroker, this is a classic moment of risk and opportunity. While the immediate aftermath of any Powell departure could see asset prices whipsaw, medium-term effects would hinge on the Fed’s next moves and broader market sentiment. Vigilant risk management and a diversified approach across asset classes become crucial in such an environment.
