Things have heated up in Washington these days. The Department of Justice's investigation into the Federal Reserve appears to be a routine audit related to building renovations on the surface, but anyone can see the real underlying struggle.

The key lies in the timing and context. Trump has been dissatisfied with the pace of rate cuts, and Powell previously blamed the slow rate cuts publicly on tariff policies, effectively slapping the president in the face. Now, the DOJ's subpoena arrives right at this critical juncture at the Fed headquarters. This is no coincidence; it’s a display of power.

The most unsettling part is the market’s reaction. It’s not the investigation itself that causes fear, but the expectation that "Powell might be forced to resign." If this becomes reality, the current interest rate cut trajectory that everyone is betting on will be completely rewritten. If the new chair is more willing to bow to political pressure, "violent rate cuts" could shift from market rumors to actual policy. That’s when liquidity will truly flood out like a dam breaking.

In the short term, any news involving high-level instability will trigger sell-offs and panic. In the long term, if the Fed’s independence is weakened, and policy shifts from data-driven to politically driven, the liquidity environment in crypto markets will undergo drastic restructuring. This is not just about interest rates; it’s about the entire trust structure of the financial system.

Right now, it’s all about whether Powell can hold onto his chair. If he can’t, the next wave of market volatility could be more intense than most expect.