All other things being equal, easier monetary policy tends to be good for risk assets – crypto surely among them. Bitcoin joined more than $ 120,000 for the first time during the weekend while the pressure on the president of the United States Federal Reserve Hawkish, Jerome Powell, withdrew or is licensed even higher. Coincidence?
To revise, Jerome Powell – which rushed through 75 basic rate of rate before the 2024 elections – quickly went to a more bellicist position after the election of Donald Trump (although it has allowed a reduction of more than 25 base points just after November)And he was not seated well with the president.
“Frankly, it’s about breaking a few heads,” the former Fed governor Kevin Warsh said on Fox News on Sunday. Warsh, which has always been presented as a possible possible replacement for Powell, added that the $ 2.5 billion renovation project in the Central Bank was among several examples of the way the Fed “lost its way” and said it was time for the “diet change”.
Also participate in television on Sunday and also another competitor to lead a Post-Powell Fed, the director of the National Economic Council Kevin Hasset said that the president’s possible power to dismiss Jerome Powell “was examined … but certainly if there was a cause, he does.”
The last angle of attack on Powell is the $ 2.5 billion renovation project of the Fed. Powell is questioned not only about massive expenses, but to know if he may have induced the congress induced in his testimony concerning the renovation. Management and budget office (Omb) The director Russ Vought last week sent Powell a list of questions concerning the project.
The Fed during the weekend has created a new FAQ page on its website to give its side of history.
Trump does not care
Adding his comments this weekend, the president said it would be “a good thing” for the country if Powell was to leave.
“Jerome Powell was 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 so.”
“I do not know what he knows about construction, but you are talking about excess costs,” said Trump about the $ 2.5 billion renovation. He recalled that the project had been approved and started to move forward while Joe Biden was still president.
Regulatory angle also
While Powell has kept a publicly neutral position towards the crypto, a new Fed chair could be considered a positive for the community even beyond what would surely be easier.
Powell, over the years, has maintained its position according to which Bitcoin is a competitor of gold rather than the US dollar since people do not use it as a payment method but rather as an investment vehicle.
However, he has repeatedly called for clearer regulations, in particular around stablescoins and their risks to financial stability when the industry continued to develop the most general. He also highlighted the importance of consumer protections as well as concerns concerning the practices of “debannage” in which financial institutions are obliged to break links with cryptographic companies because of the risks associated with the asset class.
