Trump Ready to Destroy the FED: Should Crypto Investors be Worried?

Former President Donald Trump recently stated that presidents should have the right to influence Federal Reserve (Fed) policy, marking a potential major shift in the historic independence of the U.S. central bank. This statement comes as Trump prepares for a possible re-election in November 2024 and could have significant implications for financial markets, including cryptos.

Donald Trump wants to destroy the independence of the FED!

Trump has often criticized Jerome Powell, the current Fed chairman, whom he appointed in 2017. During his first term, Trump frequently expressed his displeasure with Powell’s decisions regarding interest rates, even using Twitter to voice his disagreement. If Donald Trump is re-elected, he may seek to exert more direct influence over the Fed, which could have significant repercussions on financial markets, including the crypto market.

The independence of the Fed is crucial for maintaining the confidence of financial markets. However, Trump and his advisors have suggested changes that could reduce this independence. Notably, by subjecting the Fed to review processes similar to those of executive agencies. Such a measure could make monetary policy more susceptible to political pressures, which could have unpredictable consequences for cryptos.

Should crypto investors be worried?

Cryptocurrencies, such as Bitcoin and Ethereum, are particularly sensitive to Fed monetary policies. Increased intervention by the White House in Fed decisions could lead to increased volatility in the crypto market. For example, lower interest rates could stimulate investment in digital assets, while higher rates could have the opposite effect.

Additionally, Trump has hinted that he could replace Powell as early as 2026 if re-elected. This uncertainty regarding the future direction of the Fed could also influence crypto investors, who often seek to protect themselves against economic and political instability.

Trump’s statements about the Fed, along with those about Gary Gensler, could have profound implications for the crypto market. Investors will need to closely monitor the evolving political and economic situation to adjust their strategies accordingly.