Is the Fed’s $2.5B Renovation the Real Reason for Powell’s Crypto Woes? 🤔

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What to know:

  • The Trump administration, in a move that could only be described as a masterclass in subtle coercion, has decided to question the Fed’s $2.5 billion renovation project. This, of course, is just a convenient way to put more pressure on Chairman Powell to step down or face the music. 🎵
  • Two potential replacements for Powell, who shall remain nameless to avoid any unnecessary legal entanglements, have been vocal in their criticism of the Fed leader over the weekend. It’s almost as if they’re auditioning for the job. 🎤
  • A new Fed chair, handpicked by President Trump, would likely be a big fan of the White House’s ongoing campaign for much lower interest rates. Because, you know, why not? 🤷‍♂️

All things being equal, easier monetary policy tends to be good for risk assets — and crypto is no exception. Bitcoin, in a move that could only be described as a cosmic coincidence, rallied to above $120,000 for the first time ever over the weekend. Was it the pressure on hawkish U.S. Federal Reserve Chairman Jerome Powell to step down or be fired? Or just the universe’s way of saying, “Hey, why not?” 🌌

To review, Jerome Powell, who once rushed through 75 basis points of rate cuts before the 2024 election, quickly switched to a more hawkish stance after Donald Trump’s election (though he did allow one more 25 basis point cut just after November). This, as you might imagine, did not sit well with the president. 🤦‍♂️

“Frankly, it’s about breaking some heads,” said former Fed Governor Kevin Warsh on Fox News on Sunday. Warsh, who has been consistently touted as a leading possible replacement for Powell, added that the central bank’s $2.5 billion renovation project was just one of many examples of how the Fed “has lost its way” and that it was time for a “regime change.” Because, you know, why not just renovate the whole system while you’re at it? 🛠️

Also appearing on TV on Sunday and another contender to lead a post-Powell Fed, National Economic Council Director Kevin Hassett said the president’s possible power to fire Jerome Powell is “being looked into … but certainly if there’s cause, he does.” Because, you know, it’s always good to have a backup plan. 📝

The latest angle of attack against Powell is, you guessed it, the Fed’s $2.5 billion renovation project. Powell is being questioned not just over the massive expense, but over whether he may have misled Congress in his testimony regarding the renovation. Office of Management and Budget (OMB) Director Russ Vought last week sent Powell a list of questions regarding the project. Because, you know, why not just ask nicely? 🙏

The Fed, in a move that could only be described as a desperate attempt to clear the air, created a new FAQ page on its website to give its side of the story. Because, you know, transparency is key. 🗝️

Trump doesn’t ease up

Adding his comments over the weekend, the president said it would “be a great thing” for the country if Powell were to exit. “Jerome Powell has been very bad for our country,” he added. “We should have the lowest interest rate on Earth, and we don’t. He just refuses to do it.” Because, you know, why not just make it rain? 🌧️

“I don’t know what he knows about building, but you talk about cost overrun,” Trump said of the $2.5 billion renovation. He reminded everyone that the project was approved and began moving forward while Joe Biden was still president. Because, you know, it’s always good to throw a little shade. 🌞

Regulatory angle as well

While Powell has kept a publicly neutral stance towards crypto, a new Fed chair could be seen as a positive for the community even beyond what surely would be easier monetary policy. Because, you know, why not just shake things up a bit? 🚀

Powell, over the years, has maintained his stance that bitcoin is a competitor to gold rather than to the U.S. dollar, given that people are not using it as a form of payment but rather as an investment vehicle. However, he has repeatedly called for clearer regulation, specifically around stablecoins and their risks to financial stability as the industry continued to grow more mainstream. He has also stressed the importance of consumer protections as well as concerns about “debanking” practices in which financial institutions are forced to cut ties with crypto firms due to the risks associated with the asset class. Because, you know, it’s always good to cover all your bases. 🛡️

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2025-07-14 18:12