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The Federal Reserve is an independent bank and government-sponsored enterprise (GSE), not an agency or office of the federal government. So, the president and Congress cannot dismiss the Fed chair and appoint a new one to enact the monetary policies they support.
The Fed is set up to be an independent central bank.
But, Trump’s pressure campaign on Powell could get him to cut interest rates again. He did last time Trump was in office after the president publicly pressed him to cut rates unlike anything the US has seen in recent history.
Trump Pressures Powell to Cut Rates
Trump is not the most traditional guy when it suits him not to be. It is unusual for the president to lobby the Fed chair to set rate policy. It’s not common either for presidents to pepper their messages with insults for emphasis.
But Trump is an economist, business executive, and micromanager. When it comes to policies, he sees them as the linchpins to exercising the government’s power in a realistically useful way. He also has a sarcastic, thorny Steve Jobs/Jack Welch leadership personality.
As if to back the president on rate cuts, the S&P 500 closed 2.5% lower a day after he began pummeling Jerome Powell for more rate cuts earlier in April.
Will History Repeat for Bitcoin Prices?
In a post on his Truth Social media app, Trump said the economy is at risk of slowing down “unless Mr. Too Late, a major loser, lowers interest rates, NOW.” Meanwhile, his push for a US Bitcoin reserve is sparking off a new global arms race for BTC.
If he gets the rate cuts, Bitcoin’s price could also skyrocket again.
Right around this time in 2019, BTC traded for $5K and Trump was playing the same game. In the next 12 months or so, the Fed eventually cut rates to zero. 12 months after that, BTC traded for $60K.
The last Friday in April, Bitcoin was poking above $95,000 with bulls eyeing $100,000.
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