Bitcoin surged by 5% (approximately $5,000) following Jerome Powell’s remarks at the Federal Reserve’s annual Jackson Hole Symposium, sparking fresh momentum in a bull market that has been quietly crushed since early 2024.

For most of this cycle, Bitcoin rise has been countering the headwinds of financial tightening. The Bull Run story began in June 2023 when BlackRock submitted a Spot Bitcoin ETF application. Since then, despite persistent inflation concerns, hiking rates and constant talk of “longer and higher,” Bitcoin has been shaking macro resistance and marching higher.

You could potentially mark a turning point today. Powell’s speech hinted at what the market was waiting for. After nearly two years of restrictive policy aimed at cooling inflation, the Fed chair acknowledged that conditions had changed. Inflation has cooled from its peak, slowing economic growth, and the strain of stricter monetary policy shows a crack in the system (see Recent Jobs).

For the first time in this cycle, Powell’s tone suggested that the Fed was ready to ease the grip.

The market response was immediate. Bitcoin ripped higher because traders were aware of what this meant (~$117,000 at this time of writing). Risk assets thrive when the central bank flashes, and Bitcoin, the most difficult money in existence, tends to be the fastest horse when the Fed runs through the cave into its own new reality.

This is more than just a short-term meeting. It could be an inflection point that turns into a stable, resilient bull market. The Fed’s attitude was a damper that remains in the advantages of Bitcoin. If Powell and FOMC signal a shift to accommodation, Bitcoin is standing to disproportionately benefit.

We’re still early. This bull market was born in the shadow of BlackRock’s ETF filing and matured by merciless skepticism and macrodrugs. Now, as policy winds begin to blow, the path forward may be similar to the previous parabolic stage of the Bitcoin cycle.

The message from Jackson Hole is clear: The Fed is forgiving. Bitcoin has already responded. And if history is a guide, real fireworks may be on the way.

This article is a take. The opinions expressed are entirely the authors and do not necessarily reflect the opinions of BTC Inc or Bitcoin Magazine.

U.S. Treasury Secretary Scott Bessent is calling for a review of the central bank’s operations as Federal Reserve Chair Jerome Powell faces mounting pressure to resign.

In a new interview with Bloomberg Television, Bessent says that the Federal Reserve is in need of deeper scrutiny as its budget and operations have expanded over the years.

Bessent’s comments come as President Donald Trump has said he hopes Powell quits and has also considered attempting to remove him, all while slamming the Fed chair for not cutting interest rates.

“The President has said he is not going to fire Chair Powell. I was somewhat surprised that [economist] Mohamed El-Erian came out and said that [Powell should resign]. And what I’ve come out and said is that I believe that it would do Chair Powell a favor, and he would be doing the institution a favor, if he did an internal review, separate monetary policy from everything else.

And this is something that [economist and former U.S. Secretary of the Treasury] Larry Summers and I agree on, is this mission creep from the Fed is endangering their independence of monetary policy, all these other things that they’re engaging in could threaten monetary policy.

It is a big, sprawling institution. The central budget for the board is up 4x since 2004, and every institution needs to examine themselves.”

Bessent also says he’d support Powell overseeing the agency’s review, despite the criticism he’s facing.

“It could be a committee. It could be a group. They could invite outside experts in. The Bank of England after the 2022 rate hike shock went back and did a very good examination of what went wrong with monetary policy that brought in outside experts. I think an internal review would be a good start. And if the internal review didn’t look like it was serious, then maybe their could be an external review.”

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The Chair of the Federal Reserve says financial markets are dealing with a unique set of circumstances that may be contributing to dollar weakness.

In a recent testimony to the US Senate, Powell tells members of the Senate’s banking panel that while the US dollar appears to be doing better, the Fed has yet to formally form an opinion on the matter.

“I would go back to the thought that markets have been digesting an unusually challenging set of circumstances and have reacted the way they reacted. The dollar has kind of stabilized just now, in fact it’s moved back up in the last couple of weeks a bit. There are plenty of people who are still writing that the dollar is still overvalued, we don’t have a view on that of course…

I don’t really have an official view I’d like to share, [but] I think there are possible explanations…one of which is that people still feel the dollar is highly valued, but we’ll see.”

Touching on the subject of tariffs, Powell says markets are in uncharted territory since tariffs have only ever been going down for many decades.

“We’ve been going through a long period where tariffs have been going down. Since World War 2 really, it’s been a process of lowering tariffs globally…

There isn’t a lot of modern learning on that. One of the reasons 1750875178 is so challenging is that we don’t have modern precedent.”

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US President Donald Trump has more insults for Federal Reserve Chair Jerome Powell.

At a bill signing ceremony on Thursday, Trump claimed the government would save $600 billion a year in short-term debt payments if Powell lowered the federal funds rate by 2 percentage points.

In May, the Federal Open Market Committee (FOMC) announced that it planned to maintain the target range for the federal funds rate at 4.25-4.5%, arguing that it was the most suitable level to achieve both maximum employment and controlled inflation. The Fed has held interest rates steady since December, when it cut the rate by 0.25%.

Trump says he’s not planning on firing Powell, but he slammed the Fed chair for not adjusting course.

“We’re going to spend $600 billion a year – $600 billion – because of one numbskull that sits there [and says] ‘I don’t see enough reason to cut the rates now.’ And the problem he’s got, and I explained to him… cut your rates now, there’s no inflation. We got it down, we got prices down.” 

Inflation rose by 2.4% in May, according to the Bureau of Labor Statistics. That was slightly less than the 2.5% increase predicted by economists, CBS reports.

Powell met with Trump last month following a barrage of insults from the president. The Fed, however, noted in a statement following the meeting that Powell did not discuss interest rate expectations with the president.

“At the President’s invitation, Chair Powell met with the President today at the White House to discuss economic developments, including for growth, employment, and inflation.

Chair Powell did not discuss his expectations for monetary policy, except to stress that the path of policy will depend entirely on incoming economic information and what that means for the outlook.

Finally, Chair Powell said that he and his colleagues on the Federal Open Market Committee (FOMC) will set monetary policy, as required by law, to support maximum employment and stable prices and will make those decisions based solely on careful, objective, and non-political analysis.”

Trump has repeatedly criticized Powell for not slashing interest rates, saying earlier in May that communicating with the Fed chair was “like talking to a wall.”

“The Bank of England cut. China cut. Everybody’s cutting but him. I don’t know, we’ll see what happens. It’s a shame. I call him ‘Too Late.’ Too Late Powell, that’s his nickname. And it’s a shame, it’s ridiculous… he’s always too late. But in this case, it’s not going to matter that much because our country is so strong, we’re so powerful in terms of economic strength and what we’ve done.” 

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US Senator Elizabeth Warren warned that if President Donald Trump eventually moves to fire Federal Reserve Chair Jerome Powell, it could undermine investor confidence in the integrity of US capital markets and trigger a financial crash.

During an appearance on CNBC, the Massachusetts Senator said the President does not have the legal authority to remove Powell from his position. Moreover, removing Powell would weaken the financial infrastructure of the US, Warren added:

“If Chairman Powell can be fired by the President of the United States, it will crash the markets. The infrastructure that keeps this stock market strong and, therefore, a big part of our economy strong, and a big part of the world economy strong, is the idea that the big pieces move independently of politics.”

“If interest rates in the United States are subject to a president who just wants to wave his magic wand, this doesn’t distinguish us from any other two-bit dictatorship,” Warren continued.

President Trump has repeatedly called for Powell’s termination, citing the chairman’s hesitancy to lower interest rates. Lower interest rates are usually considered a positive catalyst for risk-on asset prices, including cryptocurrencies, and could reverse the market downturn brought on by the trade war and current macroeconomic pressures.

Related: Fed’s Powell reasserts support for stablecoin legislation

Trump’s feud with the Federal Reserve chairman

Trump criticized Powell for not cutting interest rates and called for his termination again in an April 17 Truth Social post, which inflamed speculation that he would follow through on threats and find a way to remove the chairman.

Senator Rick Scott echoed Trump’s calls to remove Powell. “It’s time to clean house of everyone working at the Federal Reserve who isn’t on board with helping the American people and fighting for their best interests,” Scott wrote in an opinion piece published on Fox News.

The Trump administration has repeatedly stated that lowering interest rates is a top priority. Market analyst and investor Anthony Pompliano recently speculated that Trump deliberately crashed financial markets to force lower interest rates.

At the time, Pompliano cited a reduction in the yield of the 10-year US Treasury Bond to just 4%. The 10-year bond yield has climbed back up to 4.3% since then.

Magazine: Meebits and CryptoPunks are like Hot Wheels for adults: New MeebCo owner Sergito

]]> https://earlybirdsinvest.com/firing-jerome-powell-will-crash-financial-markets-sen-elizabeth-warren/feed/ 0 31576 https://earlybirdsinvest.com/jerome-powell-just-got-ripped-apart-can-trump-fire-powell-for-no-rate-cut/ https://earlybirdsinvest.com/jerome-powell-just-got-ripped-apart-can-trump-fire-powell-for-no-rate-cut/#respond Fri, 14 Feb 2025 02:37:26 +0000 https://earlybirdsinvest.com/jerome-powell-just-got-ripped-apart-can-trump-fire-powell-for-no-rate-cut/

Can Trump Fire Powell? Federal Reserve Chair Jerome Powell Testimony fielded questions at Congress on everything from inflation to rate cuts for a second Day.

Over two days of testimony, Federal Reserve Chair Jerome Powell fielded questions from Congress on everything from inflation and monetary policy to crypto banking and the Fed’s autonomy. His careful yet telling responses outlined the central bank’s current priorities and future direction.

But first, let’s take a quick look at the market – here’s the state of the crypto in 2025 so far:

All these events make Bitcoin dump. How does that make you feel? Me? Not good.

Jerome Powell: ‘We Aren’t There on Inflation’

Inflation took center stage during Powell’s testimony, spurred by a recent CPI report showing inflation hitting 3%. While acknowledging progress, Powell stressed the Fed’s determination to push it lower, declaring, “We are close but not there on inflation.”

Speaking to the Senate Banking Committee, Powell confirmed the FOMC’s intent to maintain restrictive rates for now, noting, “We want to make more progress on inflation.” Similar remarks to the House underlined the Fed’s cautious stance, with no rush to ease interest rates in a stable

“We’re in a pretty good place with this economy,” Powell said. “With inflation taking time to align with our 2% target, our restrictive stance remains appropriate.”

The US government has stolen 26.1% of your purchasing power since 2020 through inflation.

If you’re not making over 26.1% more money than 2020, you’re poorer.

If your net worth hasn’t risen by 26.1% since 2020, you’re poorer. pic.twitter.com/8suyqUz7pD

— Darth Powell (@VladTheInflator) February 12, 2025

The hearings turned to crypto banking, with Jerome Powell addressing safeguards against a meltdown involving major crypto issuers. He stressed the importance of banks grasping the risks tied to crypto ventures.

“It’s appropriate to ensure that banks engaging in crypto activity understand the risks involved,” he said while warning regulators to avoid overcorrection. “You don’t want to go too far. These activities already operate within a framework where banks understand, and we understand, what they’re doing.”

Independence of the Federal Reserve: Can Trump Fire Powell?

The hearings also turned to the Federal Reserve’s independence, with Powell drawing a clear line on presidential influence. Responding to spats with former President Trump, who repeatedly criticized Fed policy, Powell underscored that the law shields the central bank from interference

During the hearing, Sen. Jack Reed (D-R.I.) asked Powell if the president could oust Fed board members, referring to recent Kennedy Center events. Powell shut it down. “It’s pretty clearly not allowed under the law,” he said, stressing that the Fed won’t bow to political interference.

Quantitative easing found its way into the discussion, with Powell clarifying that it’s a tool reserved for dire situations. “Quantitative easing is a tool we only use when rates are already at zero,” he said, addressing concerns over its risk of spurring inflation or devaluing the dollar.

Powell held a careful line on tariffs, particularly those aimed at China. He acknowledged trade complexities, noting that free trade principles still apply—though not as seamlessly when a major global partner “doesn’t really play by the rules.” Yet, he maintained, “It’s not the Fed’s job to make or comment on tariff policy.”

Takeaways from Jerome Powell’s Testimony Day 2

This week’s testimony laid Powell’s priorities bare—tackling inflation, anchoring monetary policy, and holding the line on the Fed’s independence. He also addressed crypto’s uneasy merger with conventional finance while threading the needle between transparency and economic stability.

EXPLORE: 15 New & Upcoming Coinbase Listings to Watch in 2025

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