U.S. President Donald Trump has once again directed his ire towards Federal Reserve Chairman Jerome Powell, urging the Fed to take decisive action. On August 1st, Trump criticized Powell sharply on Truth Social for maintaining the policy rate in the 4.25-4.50 range, calling on the board to take control if Powell fails to reduce rates. Following the Federal Open Market Committee (FOMC) meeting on July 30th, Powell had stirred markets by expressing patience in observing data during a press conference in Washington, suggesting that the inflation target was still out of reach.
Trump’s Persistent Pressure on the Fed
Following the conclusion of the FOMC meeting on July 30th, Fed officials decided once more not to cut interest rates, citing upward pressure on prices due to tariffs. Powell, addressing the press after the decision, stated that they were adopting a selective approach and looking for clearer signals before the potential rate cut in the September meeting. However, Trump insisted that rapid action is needed to favor American debtors, comparing the situation to Europe’s recurring rate cuts and labeling the Fed’s independence as “so-called.”
Trump’s recent remarks reflect a continuation of his call for action on July 23rd but with a more aggressive tone. The dissent expressed by two Fed members who advocated for immediate rate cuts highlights growing divisions within the organization. Despite this, Powell still enjoys support from the majority. According to the Federal Reserve Act, decisions are made collectively by a seven-member board and five regional presidents, making Trump’s demand for “Board control” contentious in practice.
Experts note that Trump’s statements could amplify political pressure on the Fed, yet it seems unlikely that the board would alter the current path on rates without removing Powell from his position. If internal debates continue, calls for reforms related to its dual mandate (price stability-employment) might reach the congressional agenda. Nevertheless, Powell remains committed to upholding the institution’s independence, emphasizing its importance.
A Downward Impact on Cryptocurrency Markets
The likelihood of a 25 basis point cut in September, according to FedWatch data, decreased from 58% to 39.2% following Powell’s remarks. As the yield curve flattened, mortgage rates rose by 20 basis points. Although the S&P 500 reacted with limited decline due to the anticipated rate decision, Powell’s comments and Trump’s latest tariff actions on July 31st prompted a downturn in global markets, including the cryptocurrency sector.
Bitcoin (BTC) 
$77,464, the foremost cryptocurrency, fell 3.23% within the last 24 hours, reaching as low as $114,705. Meanwhile, Ethereum (ETH) 
$2,315, guiding the altcoin market, dropped 6.31% to $3,600 within the same period. Investors now await the upcoming employment and inflation data for August.
