Trump vs. The Fed: Could Powell’s Ouster Spark a Crypto Revolution?
Washington's worst-kept secret: Trump wants Powell gone. But what happens when political theatrics collide with monetary policy—and why crypto could be the unlikely winner.
Fed chairs don’t usually get fired. Then again, Trump doesn’t usually follow the rulebook. We break down the legal minefield—and why Bitcoin maximalists are licking their chops.
Behind the drama: The 1935 Federal Reserve Act gives presidents removal power... but only 'for cause.' Translation? Powell’s job is probably safe—unless Trump gets creative with the definition of 'cause.'
Crypto’s silver lining: Every Fed credibility crisis sends fresh capital fleeing toward hard money. Last political standoff? BTC rallied 22% in 30 days. Coincidence? (Spoiler: Wall Street hates uncertainty more than it hates Bitcoin.)
The kicker: If Powell exits, expect rate cuts, dollar weakness, and the mother of all risk-on rallies. Gold bugs and crypto degens might finally have something to agree on—much to Jamie Dimon’s horror.
Hostile conditions
The Federal Reserve Act protects Powell from removal except “for cause” misconduct or malfeasance, not policy disagreements.
Legal precedent from Humphrey's Executor v. United States (1935) established this independence, affirming that the president cannot dismiss officials from independent agencies, such as the Federal Reserve, over policy disagreements.
The ruling drew a line between executive authority and the autonomy of regulatory bodies, meaning Trump cannot legally fire Powell simply for maintaining higher interest rates.
Still, there are other ways to apply pressure without formal removal.
“On one hand, he can choose to continue criticizing Powell in public, a frequent and toxic approach he often utilizes,” Andrew Rossow, digital media attorney and CEO of AR Media, told Decrypt.
Trump could have Congress “hold ‘hostile’ or adversarial hearings about the Federal Reserve,” while “weaponizing or abusing processes calling for budget reviews, red tape, and other aggressive conditions against the Fed in efforts to make their life more difficult,” Rossow said.
The Fed could also file lawsuits that challenge some Fed decisions, “arguably wasting resources of the court,” he added.
On Monday, Rep. Anna Paulina Luna (R-FL), a Trump ally, escalated matters by filing a criminal referral against Powell, claiming he “knowingly misled” Congress about the costs of the Fed’s headquarters renovation.
The situation opens a paradox, Rossow argues.
“While firing Powell might temporarily boost crypto prices due to dollar weakness and rate cut expectations, it WOULD fundamentally undermine the stable financial system that crypto ultimately depends on,” he said.
For the short term, “crypto might temporarily benefit as a 'chaos hedge’ against dollar weakness and Fed politicization,” but for the long run, “maintaining a destabilized U.S. financial system could hurt a significant, if not the majority, of risk assets—crypto included,” Rossow said.