U.S. Treasury Secretary Advises Trump Against Firing Fed Chair

Treasury Secretary Scott Bessent has privately advised President Donald Trump not to dismiss Federal Reserve Chairman Jerome Powell before Powell’s term ends in May next year.

The advice reflects concerns of potential economic disruption and legal challenges, especially as the Federal Reserve has hinted at possible interest rate reductions.

Treasury’s Caution and Its Market Implications

Bessent discussed the stability in current U.S. economic conditions and emphasized the positive market responses to existing policies. His warnings against Powell’s dismissal were primarily aimed at avoiding political turmoil and maintaining an optimistic market outlook in anticipation of the electoral cycle. Bessent noted,

If Powell were removed, legal complications could arise, affecting political dynamics and economic perceptions. Meanwhile, the Federal Reserve’s potential rate cuts could provide much-needed macroeconomic adjustments without the disruption of leadership changes.

“Firing Powell would be a mess. And not the fun, ratings-friendly kind Trump likes, this one would backfire. Badly.”

Historical Parallels and Current Economic Indicators

Did you know? Powell’s potential dismissal echoes Richard Nixon’s pressure on Fed Chair Arthur Burns in 1971, causing market fluctuations tied to leadership volatility.

Bitcoin, under the symbol BTC, has maintained a current price of $118,250.73, with a market cap of approximately $2.35 trillion and a 24-hour trading volume around $52.54 billion, as reported by CoinMarketCap. Notably, BTC experienced a 90-day increase of 36.02%, even amidst heightened U.S. monetary policy discussions.

The Coincu research team highlights that ongoing stability in legislative and regulatory environments could bolster investor confidence. Historical patterns suggest that markets favor predictable leadership in financial institutions, recognizing potential innovations in monetary policy adaptations if Powell stays through his term.