U.S. President Donald Trump has reignited his feud with Federal Reserve Chair Jerome Powell, calling him “stupid” and accusing the Fed of hindering economic growth. Speaking from the South Lawn of the White House, Trump criticised the Fed’s reluctance to lower interest rates, claiming it is costing the U.S. economy billions.
“He’s a political guy who’s not a smart person, but he’s costing the country a fortune,” Trump remarked, asserting that interest rates should be two percentage points lower. The Fed has maintained rates between 4.25% and 4.50%, while Europe has implemented multiple rate cuts.
Interest chances of getting cut today | Source: CME FedWatch
Despite Trump’s frustrations, market experts predict no immediate rate adjustments. The CME FedWatch tool suggests a 99.9% chance the Fed will hold rates steady in today’s meeting.
Inflation Worries and Policy Gridlock
Trump dismissed inflation concerns raised by Powell, arguing that inflation is not currently a threat. “If he’s worried about inflation, that’s OK. I understand that. I don’t think there’s going to be any. So far, there hasn’t,” he said.
However, Powell’s cautious approach reflects the Fed’s intent to avoid potential inflation spikes. Trump hinted that Powell’s decisions may be politically motivated, even joking about replacing him after his term ends in May next year. “I’d do a much better job than these people,” the President quipped.
Bitcoin Stagnates Ahead of Fed Announcement
Amid the political drama, Bitcoin has remained relatively stable. After briefly dipping below $104,000 yesterday, the cryptocurrency attempted to recover to $105,000 but fell back to $104,873 as of now. Market participants appear to be in a holding pattern, awaiting the Fed’s decision and guidance on future monetary policy.
If the Fed signals a hawkish stance to curb inflation, Bitcoin could experience a significant downturn, potentially dropping below $100,000. Conversely, hints of rate cuts later this year could reignite bullish momentum, pushing Bitcoin past $110,000.
What’s Next for Crypto Markets?
The Fed’s policy decisions are closely watched by cryptocurrency investors, as interest rates indirectly influence liquidity and risk appetite in financial markets. A prolonged high-rate environment could suppress Bitcoin’s growth, while lower rates might drive renewed interest in speculative assets like cryptocurrencies.
For now, Bitcoin holders and traders are eyeing today’s Fed meeting with cautious optimism. The balance between inflation control and economic growth will shape both traditional and crypto market trajectories in the months ahead.
