Bitcoin Holds Steady Near $85K Amid Trump–Powell Tensions and Economic Jitters
Bitcoin hovered just below $85,000 late Thursday as a swirl of political and economic uncertainty gripped markets. The latest tremor? A deepening rift between President Donald Trump and Federal Reserve Chair Jerome Powell that’s stirring anxiety across Wall Street and beyond.
Markets slipped on Wednesday after Powell issued hawkish remarks criticizing Trump’s renewed tariff plans. The Fed Chair warned these could drag the U.S. economy into the dreaded stagflation zone—slowing growth paired with rising inflation. Powell signaled that interest rate hikes might remain on the table longer than expected, emphasizing the Fed’s priority on controlling prices.
The tension between the two leaders has been simmering since Trump returned to the White House. Although Trump originally tapped Powell for the role back in his first term, he’s reportedly been unhappy with Powell’s decisions ever since. According to a Wall Street Journal report, Trump has been floating the idea of removing Powell, even as his allies—including Treasury Secretary Scott Bessent and former Fed Governor Kevin Warsh—urge restraint, warning that such a move could rattle already fragile markets.
Despite Trump’s apparent desire to replace Powell, the Fed chair remains protected by law and is unlikely to be forced out before his term ends in May 2026. Nevertheless, odds of his early exit have surged on the prediction platform Polymarket, where traders pushed the chances of Powell getting the boot this year up to 19%, the highest level since January.
Adding fuel to the fire, the European Central Bank announced its seventh straight rate cut on Thursday, pointing to deteriorating economic growth overseas. Meanwhile, a sharp drop in the Philadelphia Fed’s manufacturing index—now at its lowest in two years—combined with a spike in input prices, amplified concerns about stagflation stateside.
Despite the storm clouds, the broader equity markets treaded water. The S&P 500 and Nasdaq remained largely flat.
Crypto Market Keeps Its Cool
Bitcoin (BTC) and Ethereum (ETH) both edged up 0.8% over the past 24 hours, with broader gains seen across major altcoins like bitcoin cash (BCH), NEAR, and AAVE.
As the political power play in Washington escalates and inflation worries deepen, all eyes remain on how Bitcoin and its fellow digital assets weather the turbulence.