Trump's Latest Target: Jerome Powell??

In a month that has already been full of surprise policy shifts and shocking moves that have massively altered the course of cryptocurrency and stock markets, many bullish traders were sitting on pins and needles in hopes of hearing good news from Jerome Powell yesterday. And unfortunately, the rate cuts that the crypto community (and Trump) were hoping for did not come... at least not yet.

Social media had been buzzing about the potential of the US Fed cutting interest rates ever since Trump announced the shocking global tariffs two weeks ago. Many in the crypto community believe that all of these tariffs were fully expected to drop crypto and global markets, with the hopes that it would result in Powell's hand being forced into cutting interest rates to assist in economic recovery.

But as he spoke at the Economic Club of Chicago yesterday, Powell warned that Trump’s newly imposed tariffs, particularly the 145%+ levels on China, could lead to a dangerous economic mix of rising prices and slowing growth. Economists call this scenario “stagflation,” a condition that makes policy-making especially difficult. Powell said the tariffs could “challenge” the Fed’s dual mission of keeping inflation low and supporting job growth.

While Powell emphasized the Fed’s independence and the legal protections around his role, Trump immediately lashed out on social media, calling him “Too Late Jerome” and hinting at his termination. With what we know about Trump's "Art of the Deal", this very well could be posturing in order to get what he wants when the time comes for the next FOMC meeting. But regardless, this clash between the US President and the country's Chair of the Federal Reserve was not one that many had on their bingo cards.

Trump claimed that the Fed should have already cut rates (which they could theoretically do at any time for emergency reasons), and blamed Powell for being slow to react, even as other central banks like the ECB have slashed rates to stimulate their economies. He has made it very clear that Powell's job security is at stake if he doesn't cave to his demands, which has created quite a bit of chaos and distrust among the integrity of the system that is supposed to be responsible for proper inflation and economic growth levels.

But in the meantime, Trump is staying busy with keeping the world optimistic about tariff deal progression. Still only two weeks since his announcements of them, traders and analysts alike are watching for when US and China can strike a deal and put an end to the trade war and retaliatory moves they continue to make. While Donald Trump's aggressive tariff plans have driven up tensions with many international partners, the President is now suggesting that a breakthrough deal with China may be just around the corner. But is this just to spark another round of temporary FOMO for stock and crypto traders?

Speaking alongside Italian Prime Minister Giorgia Meloni at the White House, he stated confidently that the U.S. and China will “make a very good deal,” even as tariff levels between the two economic giants remain at extreme highs. Though China has yet to publicly commit to formal negotiations, Trump claims that Chinese officials have shown interest in restarting talks, and he appears to be using this narrative to further reassure markets.

Even though Trump has already demonstrated that his assurances can't always be taken on immediate face value, traders are hoping to believe it's real this time. His messages on a near deal have already sparked optimism. And despite ongoing uncertainty, US stocks and crypto assets alike have already seen a modest, short-term rebound following Trump’s comments. Bitcoin climbed back above $85K, and even more speculative AI and memecoin projects saw some renewed interest.

While skepticism remains over whether Trump’s remarks signal genuine progress or strategic messaging, many traders see a potential trade deal as a key catalyst that could resolve global economic pressures, bring down inflation fears, and ultimately push risk assets higher. Some are wondering why it can't just be an immediate fix (which it probably could be). But the reality that we have seen is that the narrative of how the President conveys the tariffs to the public is usually as strategic as the tariff negotiations themselves.

The current correlation between Bitcoin and US equities remains high. This means that BTC still largely moves in tandem with the stock market, as has been the consistent long-term trend since rate hikes began in 2022, and as they were cut in 2023 and 2024. But crypto could eventually decouple if distrust in traditional monetary policy grows, and this would be music to the crypto crowd's ears. Historically, the biggest and most sustained bull runs in crypto's 17+ year existence have occurred when there is zero correlation between the two sectors.

And yes, you may notice that gold has been the big winner so far this month, reaching new all-time highs. Crypto traders have been longing for digital currencies to reach that same 'digital gold' status that real gold has, as a hedge against a potential failing or uncertain economy. After all, it is intended to be a decentralized form of currency that can obtain immunity against the status of banks. And some believe that if Trump removes Powell or forces the Fed to bow to political pressure, crypto may be seen as a safe haven for investors fleeing centralized institutions.

Thus far, Trump's ability to control the narrative and traders' emotions, regardless of how you feel about him, has been impressive. Despite ongoing tariffs and his rate cut hopes failing to pan out thus far, the crowd's market sentiment is still higher than average. Perhaps this is due to the +10% price bounce from BTC over the past 10 days, and the crowd is purely reacting to the latest price movements. But the narratives are still painting a picture that traders from around the world are at the whim of what the US President decides to do or say next.

A surge in mentions of rate cuts, Powell, and interest policies can be seen in social volume charts. The retail crowd's sentiment toward crypto still very much matters, but many would admit that their bullish or bearish narratives could be thrown out the window at any time with a quick pivot by Trump. Stay locked in, and do your best to avoid over-leveraging in either direction until the crypto picture becomes more clear.

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Disclaimer: The opinions expressed in the post are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security or investment product.