Fed Chair Powell Exit Speculation Sends Traders Scrambling

Markets twitch as whispers of Jerome Powell’s potential resignation hit the wire. Crypto volatility spikes—because nothing says ’stable store of value’ like panic-selling on unconfirmed rumors.

Traders already pricing in a dovish successor? Powell’s hawkish legacy could vanish faster than a memecoin rally. Brace for impact—the Fed’s credibility circus just added another tent.

Impact of Powell’s Potential Resignation

Economists argue that an unexpected departure of the Fed Chairman could disrupt crucial decision-making processes, ranging from inflation expectations to balance sheet management. The resulting leadership vacuum may invite increased political pressure and raise concerns about the Fed’s independence. According to market strategist Diane Roberts, the “worst-case scenario” WOULD involve an intensified search for safe havens, initiating a sell-off in US bonds, causing the dollar index to plummet, and driving gold prices to new peaks.

Another hot topic in Washington circles is President Donald Trump’s explicit call for interest rate cuts. Last week, TRUMP invited Powell to the White House, urging him to reduce the policy rate, currently set between 4.25–4.50, as a “pre-election brake.” However, Powell reiterated that he will not pivot until inflation figures improve.

As Trump heightens pressure on the Fed and Powell by stating, “his term will end soon anyway,” investment banks note that the chances of the rumor becoming a reality are minimal.

Bitcoin’s Unexpected Resilience

While Wall Street indices turned red amid Powell resignation rumors, Bitcoin (BTC)$105,377, the largest cryptocurrency, maintained a stable position around $105,000, attracting attention. Analysts suggest that despite the three-year low in the dollar index and sell-offs in bonds, Bitcoin is fortifying its “alternative safe haven” perception. Additionally, factors like institutional demand, regulatory clarity, and spot ETF flows may spur a new wave of growth without monetary expansion needs.

Nonetheless, Cryptoquant data indicates that the unrealized profit ratio in exchanges is nearing its peak since 2021, sending short-term overheat signals. Some investors argue that maintaining the $105,000 threshold could lead to a retest of the $111,000 peak, whereas others suggest that a potential Powell shock might trigger a rapid correction to $95,000 initially.

For now, market participants continue to assess the extent to which an unexpected leadership change at the Fed will affect the liquidity of the cryptocurrency market.