Jerome Powell Under Fire as Crypto Markets React to Possible Fed Shakeup

White House Pushes for Fed Leadership Change as Bitcoin Surges

The White House’s campaign to reshape the Federal Reserve’s leadership escalated over the weekend, fueling speculation in both traditional and crypto markets.

Bitcoin (BTC) surged past $120,000 for the first time ever as chatter grew louder about potential changes at the Fed. While the timing could be coincidence, crypto markets often interpret political upheaval and prospects of easier monetary policy as bullish signals.

Pressure Builds on Jerome Powell

Fed Chair Jerome Powell faces mounting political heat. After slashing rates by 75 basis points before the 2024 election, Powell shifted to a more hawkish stance following President Donald Trump’s victory—a move that has left Trump openly critical. Despite one additional 25 basis point cut post-election, Powell remains on thin ice.

“Frankly, it’s about breaking some heads,” said former Fed Governor Kevin Warsh on Fox News. Warsh, widely seen as a potential Powell successor, blasted the central bank’s $2.5 billion renovation project, saying it demonstrates how the Fed has “lost its way” and called for a “regime change.”

Another possible candidate, National Economic Council Director Kevin Hassett, hinted the administration is reviewing legal options for removing Powell. “It’s being looked into… but certainly if there’s cause, he does,” Hassett told reporters.

Renovation Sparks Scrutiny

Powell is under fire for the costly Fed renovation, with critics alleging possible misleading testimony to Congress about the scale of the project. Last week, Office of Management and Budget Director Russ Vought sent Powell a formal list of questions demanding clarity.

The Fed responded over the weekend by publishing a new FAQ page to explain its position.

Trump Turns Up the Heat

President Trump weighed in directly, declaring it would be “a great thing” for the country if Powell were replaced.

“Jerome Powell has been very bad for our country,” Trump said. “We should have the lowest interest rate on Earth, and we don’t. He just refuses to do it.”

Trump also criticized the renovation project, recalling that it was approved while Joe Biden was still president and alleging “cost overruns.”

Crypto Eyes Regulatory Shifts

Beyond the interest-rate implications, crypto markets are watching closely for potential regulatory changes if new leadership comes to the Fed.

Powell has generally maintained a neutral stance on crypto but has called for stricter rules around stablecoins and expressed concerns over consumer protection and “debanking” of crypto firms. He’s also characterized bitcoin as an investment asset, comparable to gold, rather than a true currency substitute.

A leadership change at the Fed could bring policy shifts that the crypto community views as positive, adding another layer of intrigue to the market’s current rally.