White House Gears Up for Political Showdown with Fed Chair Powell

Washington's power players are sharpening their knives—Jerome Powell's inflation-fighting regime faces unprecedented White House pressure as 2025's economic headwinds intensify.

Behind closed doors, Biden's team reportedly explores legal maneuvers to sideline the Fed chairman ahead of 2026 policy shifts. Treasury yields wobble as Wall Street whispers about 'the most hostile Fed-executive branch clash since Volcker'.

Market cynics note the timing—coming just as Powell's rate hikes finally start cooling the crypto casino economy. 'Nothing stimulates political creativity like an election year and unhappy billionaires,' quipped one blockchain VC, adjusting his inflation-hedged NFT portfolio.

Powell Under Pressure

Trump has previously claimed that Powell initiated interest rate cuts to save the Democratic Party during election times. Following his election, Trump frequently criticized Powell’s political stance, demanding interest rate cuts via weekly social media posts. Additionally, Trump highlighted the significant budget spent on renovating the Fed’s complex through his media channels. In response, the Fed justified the costs by pointing out the complexities of restoring a historic building and shifted the focus back to Trump’s tax laws.

Reports from last week suggested Powell’s potential resignation. Earlier, three Fed members hinted at possible rate cuts in July, revealing internal disagreements. These rumors gained traction when the Federal Housing Finance Agency (FHFA) Chairman took them seriously and commented publicly, fueling the controversy further.

Recently, WHITE House officials announced the preparation of a draft to remove Powell from his position. On Tuesday, Trump discussed Powell’s removal with members of Congress, although the officials clarified that no definitive timeline exists for a decision regarding the Fed chairmanship.

“Trump is likely to remove Powell soon,” stated a White House official, highlighting the ongoing speculation about Powell’s departure.

If Powell is removed and replaced with a chairperson complying with Trump’s directives, how will the Fed reassure the markets? What implications WOULD this have for the independence of the Central Bank? Despite the Supreme Court ruling against him, can Trump navigate through the removal process while handling potential economic instability during this transition?

Economic indicators show volatility, with the dollar index falling to 98, the S&P 500 dropping to 6,220, and Bitcoin$119,244 testing the $119,000 mark.