Even while Bitcoin reached a new all-time high in May and concerns about a $37 trillion “ticking time bomb” grew, it has struggled to make a splash in recent months.
As Federal Reserve chair Jerome Powell struggles with an impending “cataclysmic” disaster that is destined for the U.S. dollar, the price of bitcoin has battled to maintain the momentum that it gained after U.S. President Donald Trump won the November election.
The bitcoin price and cryptocurrency market are now primed as Trump has stated a choice on the next Federal Reserve chair would be made shortly, while Tesla billionaire Elon Musk secretly supports a warning of a shock dollar crash.
Regarding his choice for the next Fed chair, Trump told reporters on Air Force One, “It’s coming out very soon,”.
In a video posted on X, Trump reiterated his prior calls for Fed chair Powell to swiftly drop interest rates, saying, “If we had a good Fed chairman, he would lower rates and if inflation happened in a year from now or two years later, [he would] raise rates.”
The CME FedWatch tool shows that the market is divided over the Federal Reserve’s September decision, and it is now widely expected to keep rates on hold during its June and July meetings.
When asked what he thought of him, Trump went on to say that former Fed Governor Kevin Warsh is “very highly thought of.” Warsh is now the front-runner to be chosen the next Fed chair on the cryptocurrency-powered prediction platform Polymarket.
Warsh told a monetary policy panel at Stanford University’s Hoover Institution last month that “if the printing press could be quiet, we could have lower policy rates.” He explained his belief that the Fed could drop interest rates if it reduced its balance sheet. In emailed remarks, bitcoin pricing and cryptocurrency market analysts at the Bitfinex exchange stated that a rate decrease by the Fed “would be bullish for risk assets like bitcoin.”
He expects that in June, bitcoin may aim for the $120,000–$125,000 level if it sustains support above $105,000. The labor market alone won’t be the only stimulus for this; a number of other factors may also play a role, leading the Fed to lower interest rates sooner than anticipated.
Powell has been holding rates stable for months after the Fed shocked markets by starting its rate-cutting cycle in September, but Trump once again called for Powell to decrease rates this week.
The Fed has cited the imminent impact of Trump’s global trade tariffs as the reason it has kept interest rates on hold, forecasting that Trump’s so-called Liberation Day tariff onslaught will cause inflation to rise.
The latest consumer price index (CPI) inflation data in the United States is projected to show an increase in prices this week, following an ease in inflation in the first few months of 2025.
In April, the White House acknowledged that Trump was considering firing Federal Reserve Chair Jerome Powell due to Powell’s refusal to decrease interest rates, however Trump has subsequently stated that he will not try to remove Powell before his time as chair ends next year.
With rate reduction unlikely, Fed Chair Jay Powell can expect to remain firmly in the president’s crosshairs, according to Nicholas Hyett, investment manager at Wealth Club, who cited Friday’s stronger-than-expected jobs report in emailed comments.
The Trump administration, which has made it apparent that the tariffs are intended to benefit Main Street rather than appease Wall Street, will see that as confirmation. From the White House’s perspective, it is less favorable since a robust economy and growing wages reduce the Federal Reserve’s incentive to lower interest rates, which raises yields slightly and increases the cost of the fiscal splurge included in Trump’s “Big Beautiful Bill.”
