Chiara Bianchi
Federal Reserve Chair Jerome Powell stated on Tuesday that he would likely have reduced interest rates in 2025—if not for former President Donald Trump’s turbulent trade policies.
Speaking at a European Central Bank forum in Portugal, Powell responded to a question about potential rate cuts, suggesting that Trump’s erratic use of tariffs against major trading partners has forced the Fed to act cautiously.
“Yes, I believe that’s accurate,” Powell said, emphasizing that the uncertainty created by trade tensions influenced the central bank’s policy decisions.
Despite relentless pressure from Trump, who has repeatedly demanded rate cuts since returning to the White House in January, Powell has remained firm. Last week, Trump publicly insulted Powell, calling him a “stubborn mule” and a “stupid person.”
However, Powell defended the Fed’s stance, warning that premature rate cuts amid economic volatility could risk sparking inflation.
Crypto Market Unmoved by Fed Chief’s Remarks
While interest rate news often causes volatility in the crypto market, Bitcoin appeared largely unaffected by Powell’s comments. As of writing, BTC was down just 1.3%, trading at $105,859.
Still, experts note that tensions between Powell and Trump have recently contributed to price swings in both Bitcoin and other digital assets, highlighting crypto’s increasing sensitivity to macroeconomic shifts.
Support for Stablecoin Regulation
Powell also voiced support for proposed stablecoin legislation currently under discussion in Congress.
“If stablecoins are here to stay—and it looks like they are—then we need a clear regulatory framework at both the state and federal levels,” he said.
While Powell has not fully endorsed the crypto industry’s underlying principles, he acknowledged its growing relevance on Wall Street.
“There’s been a noticeable shift in tone,” Powell said during recent Congressional testimony. “It reflects the evolving role of digital assets in the financial system.”
