On equal terms, the easiest monetary policy tends to be good for risk assets: cryptography surely between them. Bitcoin recovered more than $ 120,000 for the first time over the weekend, since the pressure on the president of the United States Federal Reserve, Jerome Powell, renounces or shoots even more. Coincidence?
To check, Jerome Powell, who hastened through 75 basic points of tariff cuts before the 2024 elections, quickly changed to a more aggressive position after the choice of Donald Trump (Although it did allow a cut more than 25 basic points just after November)And he has not sat well with the president.
“Frankly, it’s about breaking some heads,” said former Fed governor Kevin Warsh, in Fox News on Sunday. Warsh, who has been constantly promoted as a possible possible replacement for Powell, added that the $ 2.5 billion renewal project of the central bank was among several examples of how the Fed “has lost its course” and said it was time for the “regime change.”
Also appearing on television on Sunday and also another contender to direct a Fed Post-Powell, the director of the National Council of Economics, Kevin Hasset, said that the president’s possible power to fire Jerome Powell is “being considered … but certainly if there is cause, he does.”
The last angle of attack against Powell is the renewal project of $ 2.5 billion of Fed. Powell is being interrogated not only for mass spending, but in case he may have deceived Congress in his testimony about renewal. Management and Budget Office (OMB) Last week, director Russ Vought sent Powell a list of questions about the project.
The Fed during the weekend created a new page of frequent questions on its website to give its side of the story.
Trump is not relieved
Adding his comments during the weekend, the president said that “it would be a big deal” for the country if Powell came out.
“Jerome Powell has been very bad for our country,” he added. “We should have the lowest interest rate on Earth, and we don’t do it. He simply refuses to do it.”
“I don’t know what he knows about construction, but you talk about excess costs,” Trump said about the renewal of $ 2.5 billion. He recalled that the project was approved and began to advance while Joe Biden was still president.
Regulatory angle too
While Powell has maintained a public posture of neutral towards cryptography, a new Fed chair could be seen as positive for the community even beyond what would surely be an easier monetary policy.
Powell, over the years, has maintained its position that Bitcoin is a gold competitor instead of the US dollar since people do not use it as a payment method, but as an investment vehicle.
However, it has repeatedly requested a clearer regulation, specifically around the stable and its risks for financial stability as the industry continued to grow more conventional. It has also emphasized the importance of consumer protections, as well as concerns about “debate” practices in which financial institutions are forced to reduce ties with cryptographic companies due to the risks associated with asset class.
