Jerome Powell, the embattled Federal Reserve Chair, finds himself at the center of a political tempest in Washington. A coalition of influential figures — including President Donald Trump, Federal Housing Finance Agency Director Bill Pulte, and Treasury Secretary Scott Bessent — is challenging his leadership, with calls for his resignation ringing louder by the day. The intrigue comes as Powell’s term extends into May 2026, yet the looming question remains: Can he weather this storm?
Trump’s Renewed Crusade
President Trump, who first appointed Powell in 2017, has rekindled a longstanding feud with the Fed Chair, accusing him of financial mismanagement and political bias. Trump’s dissatisfaction with Powell’s interest rate policies is no secret. On June 27, he lambasted Powell as a “stubborn mule” on Truth Social, alleging that his refusal to cut interest rates — currently at 4.25% to 4.5% — has cost the economy dearly. Trump’s frustrations date back to his first term when he openly mulled over firing Powell in 2019. With Trump’s re-election in November 2024, these sentiments have only intensified. This political tension is reminiscent of recent market volatility, as detailed in Bitcoin Climbs as Trump’s $5 Trillion Bill Sparks Market Volatility and Political Tensions.
Trump’s demands for Powell’s resignation have been punctuated by accusations of misconduct related to the Fed’s $2.5 billion headquarters renovation — a project that predates Powell’s tenure. Rumors of potential successors, such as Kevin Warsh or Christopher Waller, indicate Trump’s desire for a shift in Fed leadership.
Critiques from the Housing Sector
Bill Pulte, the FHFA Director, is another vocal critic, targeting Powell’s rate policies as detrimental to the housing market. On July 2, Pulte called for a congressional investigation, citing Powell’s alleged deceptive testimony about the Fed’s renovation. Supported by Senator Cynthia Lummis, Pulte’s claims paint a picture of a Fed Chair out of touch with the housing sector’s struggles, exacerbated by mortgage rates lingering between 6.6% and 7%.
Pulte’s critiques resonate within a broader context of skepticism towards Powell’s leadership. Republican Senators Rick Scott and Tommy Tuberville have echoed these sentiments, highlighting perceived fiscal irresponsibility and the Fed’s impact on taxpayers. Their calls for accountability add to the growing pressure on Powell.
The Crypto Perspective
Amidst this political turmoil, the cryptocurrency community is closely watching the unfolding drama. The Fed’s interest rate policies directly influence market liquidity and investment strategies within the crypto space. Powell’s steadfast defense of data-driven policy — despite Trump’s tariffs contributing to inflationary pressures — has maintained a cautious approach to interest rate adjustments. Yet, any significant shift in Fed leadership could signal a change in monetary policy, potentially affecting crypto markets. This is particularly relevant in light of Trump’s recent comments on crypto, as explored in Trump Punts on Crypto Divestment, Says If US Didn’t Have Bitcoin ‘China Would’.
Legal Protections and Future Scenarios
Powell’s position is guarded by legal frameworks that permit removal only “for cause.” A recent Supreme Court ruling further fortifies the Fed’s independence from arbitrary political dismissals. Yet, the specter of being rendered a “lame duck” Chair looms large, with the administration’s push for a 2026 replacement potentially undermining his authority.
Treasury Secretary Scott Bessent’s discussions of nominating a new Fed governor in January 2026 or a new Chair in May 2026 underscore this precarious path forward. Despite these challenges, Powell remains committed to anchoring long-term inflation expectations at 2%, leveraging a robust economy with 4.2% unemployment and 2.5% private domestic growth to justify his cautious stance on rates.
A Rocky Road Ahead
As this coalition against Powell intensifies — blending Trump’s fiery rhetoric, Pulte’s housing critiques, and congressional scrutiny — the future of the Federal Reserve’s leadership remains uncertain. While Powell’s legal protections offer a shield, the political climate suggests a challenging road ahead. Whether Powell can navigate these turbulent waters while preserving the Fed’s independence is a question that remains unanswered. His tenure, though not immediately threatened, faces undeniable pressure as the clock ticks toward 2026.
Source
This article is based on: Are Jerome Powell’s Days as Federal Reserve Chair Numbered?
Further Reading
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Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
