Trump’s Supreme Court Shenanigans: Is Powell’s Exit Crypto’s Gain? 🤔

by

In the grand theater of American politics, where egos clash and power plays unfold like a poorly scripted soap opera, Federal Reserve Chair Jerome Powell finds himself cast as the unlucky protagonist. Tasked with cleaning up the economic mess left by Donald Trump’s tariff policies, Powell has become the target of Trump’s latest gambit: firing him via the Supreme Court. Let us delve into this absurd drama and ponder whether Powell’s potential ousting could be a boon for the crypto market. 🍿

The Roots of the Rift

The Powell-Trump feud is no fleeting spat. Powell’s steadfast commitment to maintaining high interest rates to curb inflation has long irked Trump. In December 2024, Trump publicly declared he would not seek Powell’s removal. Yet, as with many of Trump’s promises, this one seems to have expired. By April 2025, Trump’s patience had worn thin, and the gloves were off.

The so-called Liberation Day tariffs, imposed on April 2, 2025, sent global stock markets into a tailspin. Crypto markets, ever the drama queens, responded with a 10 to 20 percent nosedive by April 7. Stock markets fared no better, experiencing their worst declines in decades. Crypto liquidations soared to a staggering $888 million on that fateful day. 📉

American markets, however, saw milder declines, thanks to whispers of a 90-day tariff pause. The White House initially dismissed these rumors as “fake news,” only to later confirm their veracity—except for China, which faced even harsher tariffs, now at a jaw-dropping 145%. The media, never one to understate, labeled the tariffs an economic “shock.”

The Fear & Greed Index plunged into “extreme fear” territory, painting a grim picture for small businesses. Pershing Square CEO Bill Ackman captured the mood perfectly in a tweet:

Our stock market is down. Bond yields are up and the dollar is declining. These are not the markers of successful policy.

I am receiving an increasing number of emails and texts from small business people I do business with or have invested in, expressing fear that they will…

— Bill Ackman (@BillAckman) April 9, 2025

Trump, ever the unapologetic showman, expressed no remorse for the market turmoil. In February, he had warned of the “pain” tariffs would inflict, framing it as a necessary sacrifice for America’s golden age. Yet, the 90-day pause and openness to negotiations with China and others shifted the narrative. Some speculate Trump’s tariffs were a scare tactic to force negotiations on America’s terms. Others believe he caved to pressure from irate billionaires and investors. Either way, the logic of burdening American companies with manufacturing operations in China remains baffling.

Indeed. I’d go so far as to say that the US is now viewed as an extremely unreliable trading partner by the rest of the world. Whilst some may hope to lessen any short-term shocks to their economies, they’ve all learned about the danger of dealing with a country that can change…

— Andy (@andyturner) April 10, 2025

On April 10, news broke that U.S. inflation had dropped. While Trump welcomed this development, he pushed for an interest rate cut to stabilize the markets. The decision, however, lies with the independent Federal Reserve, led by Jerome Powell, who has shown no inclination to cut rates.

The Powell-Trump Showdown

As reported by the Wall Street Journal, Powell finds himself in a no-win situation. Cutting rates risks unleashing inflation, while maintaining them could further slow the economy and destabilize the labor market, potentially triggering inflation anyway. 🎭

Huh? Powell said on Friday that the Fed won’t cut until the economic results of the tariffs are reflected in the data. You can’t possibly say that today’s data includes tariff pressure. The tariff wars just started last week. Moreover, @APompliano is arguing that the data lags…

— David D. Tawil (@DavidDTawil) April 10, 2025

Powell remains steadfast, prioritizing inflation control and economic stability. On April 4, he emphasized the need to assess the rapid trade policy changes unleashed by Trump. Unimpressed, Trump allegedly seeks to oust Powell through the Supreme Court. According to Bloomberg, Trump has petitioned the Court to fire high-profile officials from independent agencies, potentially targeting Powell, who has vowed not to resign before his term ends.

If the Supreme Court overturns the 1935 precedent set by Humphrey’s Executor vs. the United States, Powell could be fired. This precedent protects his position from executive interference, but Trump may argue it conflicts with Article II of the Constitution. Such a move could be seen as a power grab, centralizing authority in Trump’s hands. Yet, investors clamoring for rate cuts might applaud it.

Crypto’s Potential Windfall

In December 2024, Powell’s announcement of a low interest rate cut reversed a crypto bull run, earning him few friends in the crypto community. However, he has also been supportive, criticizing the debanking of crypto clients by financial institutions. The Fed’s earlier signal of rate cuts in 2026 hinted at a future conducive to Bitcoin adoption.

Trump may nominate a more crypto-friendly successor, such as Kevin Warsh, or someone more pliable, willing to cut rates at his whim. Lower rates could trigger inflation, benefiting Bitcoin in the short term. Yet, Trump’s overall crypto-friendly policies already bode well for Bitcoin. Bothering the Supreme Court to oust Powell, who has performed admirably, may not be the wisest move. Powell’s term ends in May 2026. Until then, we watch and wait. 🍿

Read More

2025-04-11 10:37