Former US President Donald Trump has reignited tensions by predicting the imminent departure of Federal Reserve Chairman Jerome Powell and advocating for a drastic reduction in interest rates to 1%. Trump criticized current rates as detrimental to the housing market, stating, "Powell is keeping interest rates too high, negatively impacting the housing market", and suggested rates should be lowered by 3 percentage points or more.
The White House plans to visit Fed headquarters this week amid Trump's allegations of $2.5 billion in overspending on Fed facilities—a potential justification for Powell's dismissal. Treasury Secretary Benson and Deputy Secretary Bessant echoed calls for immediate rate cuts, with Bessant blaming the Fed's "mission expansion" for excessive government spending. Trump also floated eliminating capital gains taxes on home sales.
Historically, low-rate environments correlate with crypto bull markets, as investors seek higher-yielding assets. BitcoinWorld analysis notes that sub-1% rates could weaken the US dollar and drive capital toward risk assets like cryptocurrencies, though inflation and regulatory factors remain counterweights. Trump's remarks intensify debates about Fed independence amid unprecedented political pressure on central banking decisions.