Powell Blames Trump's Tariffs for Preventing Interest Rate Cuts

In the context of investors expecting a clear turning point in monetary policy in 2025, the Chairman of the Federal Reserve, Jerome Powell, unexpectedly "doused cold water" by specifically naming the reason for this delay: the incumbent President - Donald Trump. Trump's return to the White House in January has quickly reshaped the economic landscape of America, to the extent that the Fed is forced to "tread water" to assess the situation. Fed Hesitant Before Uncertain Political Winds In an economy where every word from top officials can shake the market, Powell stunned Wall Street when he bluntly stated: Trump's tariff policies are hindering the Fed's ability to lower interest rates. Although inflation is showing signs of cooling and the U.S. economy is beginning to show some weaknesses, the Fed is still maintaining a tight monetary policy. The reason? Powell did not hesitate to respond briefly but meaningfully: "I think that's right," when asked if the Fed could have cut interest rates without Trump's intervention. The implication is very clear: the Fed cannot take the necessary steps if the Trump administration continues to make abrupt decisions, especially regarding trade and tariffs. Trump and Powell: The Policy Rivalry The tension between Powell and Trump is not new, but it has now escalated to a new level. Although Trump appointed Powell as Chairman of the Fed in 2019, Powell has become a thorn in the side of the White House due to his steadfastness in monetary policy. Just last week, Trump publicly called Powell a "stubborn mule" and "an idiot" – rare words from a President directed at a high-ranking official. Nevertheless, Powell maintained a calm demeanor, but it is clear that political pressure is disrupting the economic and financial landscape. Frozen Interest Rates – Bitcoin Fluctuates The Fed's decision to maintain interest rates not only affects the traditional financial markets. In an era where cryptocurrencies are increasingly linked to macroeconomic policies, Bitcoin and other digital currencies also become victims of the new political wave. Since the tensions between Trump and Powell escalated, Bitcoin has exhibited higher volatility. Although it only dropped 1.3% on Tuesday, the overall trend is fragile and vulnerable to any negative signals. Investors understand clearly: when high interest rates continue to be maintained, cash flow becomes scarce, and the cryptocurrency market is directly affected. Bitcoin is no longer a purely "anti-establishment" asset but has become a part of the policy rhythm of Washington. Fed Still Open to Digital Currency Technology Despite being forced to maintain a cautious policy, Powell still shows openness towards the future of digital finance. He has publicly supported a legal framework for stablecoins – a signal that the Fed is not turning its back on innovation. "There has been a major shift in Wall Street's attitude towards cryptocurrency," Powell admitted, even suggesting that the industry is entering a new phase of development. Is that a contradiction? Not really – it's the way the Fed is adapting to the reality that digital currency is becoming an integral part of the global financial landscape. When Monetary Policy Depends on a Name: Trump The confrontation between Powell and Trump is not just a personal conflict or a difference in opinion. It raises a larger question about the independence of the Fed in a deeply politicized America. Powell chose a strategy of delay and waiting for stability. Trump, on the other hand, leverages every economic decision as a tool in his re-election strategy. In this game of tug-of-war, what is being tested is not just interest rates, but the entire credibility and independent role of the Fed. The Future Depends on a Political Unknown Next step? It all depends on Trump. From technical charts to discussions about Bitcoin on social media, the name Trump is everywhere. For him, Bitcoin is no longer a threat to the USD. It is now a "Safe Valve", a strategic tool to exert pressure on traditional financial institutions. When monetary policy is influenced by politics, every tweet from Trump can change the entire market trend. Conclusion: The American economy is entering a new phase of instability, where the ambiguity and unpredictability of the White House are "tying the hands" of the Fed. While Powell strives to maintain principles and independence, Trump continues to push the limits. In the midst of this turmoil, Bitcoin – once a symbol of financial freedom – can no longer escape the power play in Washington.