Bitcoin recently experienced a significant drop, hitting a value of $117,660, unsettling the cryptocurrency community. This dramatic fall coincides with a political upheaval as former President Donald Trump criticizes Federal Reserve Chair Jerome Powell. Trump’s frustration stems from Powell’s reluctance to cut interest rates, prompting Trump to call for Powell’s removal months before the end of his term.
What Are the Allegations Against Powell?
Representative Anna Paulina Luna, a Republican from Florida, has spearheaded a call for the Department of Justice to investigate Jerome Powell. Luna accuses Powell of lying under oath on two separate occasions since his appointment. Fox News reports that this move is seen as a strong stance by the Republican Party against the Federal Reserve Chair.
“On June 25, 2025, Chairman Powell testified under oath before the Senate Banking Committee about the renovation of the Federal Reserve’s Eccles Building. During his testimony, he made several significant misrepresentations. In a letter to OMB Director Russell Vought, Powell downplayed the cost increase of the project from $1.9 billion to $2.5 billion. However, congressional investigators found neither the scope nor the budget overruns of the project were trivial.” – Complaint Letter to the DOJ
What Could Be the Political Outcomes?
Leaders are discussing whether the ongoing renovation of Federal Reserve buildings could be used as a pretext to oust Powell. Details of the allegations were unveiled last week along with the Fed’s response and Trump’s strategy to potentially remove Powell. Although Powell dismisses these claims, the focus remains on his management rather than his defense.
If Powell is found guilty by the Department of Justice, Trump might quickly place a more sympathetic figure at the Fed’s helm, favoring interest rate cuts. This could compromise the Fed’s independence, risk market stability globally, and likely worsen the downturn in the cryptocurrency arena.
- The proposed investigation could impact Powell’s position significantly.
- A power shift might lead to policy changes at the Federal Reserve.
- Such moves could exacerbate instability in global markets.
- The cryptocurrency market may see further fluctuations.
While the situation unfolds, the cryptocurrency sector remains precarious, influenced not just by market forces but also by political machinations. All eyes are now on the Department of Justice and Jerome Powell’s next moves as global stakeholders weigh the potential consequences.
