2026-01-13 00:24:14

At the beginning of 2026, the battle for the Federal Reserve Chairmanship is heating up. Trump, dissatisfied that his demand for rate cuts has not been fully met, decided to intervene, instructing an investigation into Fed Chair Powell, with Treasury Secretary Bessent quickly mediating. Behind this game is a fundamental challenge to the independence of the central bank.

The reality is that in Q4 2025, the Fed only implemented three rate cuts, each of 25 basis points, far below Trump's expectations. Frustrated, federal prosecutors launched an investigation into Powell on charges such as overspending on renovations, while Powell openly called it "political coercion." Trump had already planned personnel changes after Powell’s term ended in May 2026; his previous attempt to dismiss Board Member Lisa Cook was unsuccessful. Now, with only two weeks left for the Supreme Court debate, the situation has become more complicated—Powell’s term has been extended to 2028, and the dispersed power further intensifies this contest.

Bessent previously told Trump that this investigation could trigger market turmoil. The plan was to let Powell step down after nominating a new chair, but contrary to expectations, it strengthened Powell’s position. The leading candidates for the new chair are Kevin Waugh (41% support in polls) and Kevin Hasset (39%), whose policy orientations will directly influence future monetary policy directions.

Congress’s attitude is also divided. Senators condemn this political interference, while House Republicans choose to tacitly allow the investigation to proceed. Former Fed Chair Yellen and others issued a joint statement warning that turning monetary policy into a political tool could lead to runaway inflation and economic recession.

Market reactions have been relatively calm, but signals are already evident—gold hit a record high, the dollar weakened, and US stocks opened lower but recovered later. Regarding the pace of future rate cuts, institutional opinions vary: Citibank expects cuts of 25 basis points in March, July, and September; Goldman Sachs and Morgan Stanley believe the first cut will be delayed until June; JPMorgan is the most conservative, believing rate cuts will be difficult to achieve throughout the year. This power struggle over the Federal Reserve will have a profound impact on global financial markets, and cryptocurrency investors should closely monitor related developments.

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GateUser-3824aa38

· 5h ago

The independence of the central bank is almost gone, now it's really about whose face Trump will look at to get by. Powell has been holding on for so long, which is quite impressive, but I didn't expect Bessant couldn't even keep him. There is a reason why gold hitting new highs; in this kind of political struggle, retail investors are always the ones who pay the price in the end. The delay in interest rate cuts actually has a pretty big impact on the crypto circle; it depends on how things unfold later. Neither Kevin feels like a good choice to take the stage; policy tools are being politicized, and they still want stability? Ha. This is the real power game; Yellen and their warnings are useless. It's outrageous that the US stock market recovers lost ground, indicating that institutions are not afraid of this move at all.

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HallucinationGrower

· 5h ago

Powell really held his ground. If he's taken out this time, the crypto world will explode. The independence of the Federal Reserve is gone; only crypto remains a true safe haven. Trump's move has pushed gold to new highs, indicating the market is panicking. A bunch of Kevin players, it feels like no matter who takes over, the outlook of no rate cuts remains unchanged. Whether they will cut rates before the end of the year is a suspense more mind-boggling than a script.

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AirdropJunkie

· 5h ago

Wow, this is the legendary "political rate hike"... Gold is soaring wildly but still pretending nothing's wrong, this market really can't hold up anymore. Powell investigated for renovation overspending? That excuse is more ridiculous than stablecoins, can't they just be straightforward? Cut interest rates by 25 basis points? How angry must Trump be to pull off something like this... The crypto world is about to change. The independence of the central bank is a joke in the face of politics; even when the Fed was so tough before, it was useless. The new all-time high in gold says it all; smart money has already fled. Can we trust this rebound in the US stock market?

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ChainChef

· 5h ago

yo, fed drama seasoning this whole market recipe rn... Powell getting cooked while gold's hitting all-time highs? that's the signal we're marinating in real uncertainty fr

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TradingNightmare

· 5h ago

Trump's move is playing with the independence of the central bank as if it's a joke... Powell is also quite tough, openly speaking out against political coercion, showing backbone. I'm optimistic about gold reaching a new historical high; with the dollar so weak, trouble is bound to happen sooner or later. The pace of interest rate cuts is completely messed up; Citi and Morgan are both confused, and retail investors like us can only wait to be harvested. Yellen and their statements are useless; in the face of political interests, everything is pointless. Whoever takes over at Wosh and Hasset, the subsequent coin price trends will depend on their attitude.

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MidnightTrader

· 5h ago

Trump is at it again, this time directly targeting the Federal Reserve. The independence of the central bank is about to be compromised. --- What does the new high in gold indicate? The market is panicking, and the political interference is too obvious. --- Powell is right; this is blatant coercion. The question is, can the Fed really withstand it? --- Either of the two Kevins could change the game if they take over. Rate hikes delayed until June? Crypto still has to wait a bit longer. --- It's hilarious. Trump got impatient after only a 75 basis point cut. Managing expectations is an art too. --- The Fed has become a political tool. Yellen and others' warnings are not without reason. Is inflation about to rise again? --- Weakening dollar and new high in gold prices—this combination signals something very obvious: funds are bottom-fishing and seeking safety. --- JPMorgan's prediction of no rate cuts for the entire year is spot on. Don't expect any surprises in the first half. --- The Supreme Court will have a verdict in two weeks. Dispersed power is actually a shield for Powell. --- The market remains calm, but the divergence in the pace of rate cuts afterward is comparable to forks in the crypto world.

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