Powell vs. Waller: Inside the FED’s Battle Over Rate Cuts and Inflation

The Federal Reserve is embroiled in an internal debate over interest rate policy, with political pressure from former President TRUMP adding fuel to the fire. Trump’s budget chief Russell Vought has openly criticized Fed Chair Jerome Powell, accusing him of mismanagement and wasteful spending. The former president is pushing for aggressive rate cuts to stimulate growth, but Powell remains cautious, citing a strong economy that can withstand current rates.

Fed Governor Christopher Waller is leading the charge for imminent rate reductions, arguing that policy is "too tight" and that inflation spikes from tariffs will prove temporary. Michelle Bowman aligns with Waller, supporting a cut at the July meeting. However, voices like St. Louis Fed President Alberto Musalem urge patience, demanding more inflation data before acting. June meeting minutes reveal a fractured committee, split between those ready to ease and others wary of persistent inflation.

Market participants are closely monitoring this divide, as the Fed’s decision will ripple across asset classes. Cryptocurrencies, particularly Bitcoin and Ethereum, often react sharply to shifts in liquidity expectations. A dovish pivot could reignite risk appetite, while prolonged restraint may weigh on speculative assets.