US President Donald Trump is considering legal action against Federal Reserve Chair Jerome Powell, linking it to his demand for an immediate interest rate cut. This conflict arises following new inflation data showing a greater-than-expected cooling of consumer prices, sparking speculation on how the Fed’s decisions could impact digital asset markets. Despite the political tension, Bitcoin has edged closer to $121,000, indicating robust market momentum. In a post on Truth Social, Trump hinted at allowing a major lawsuit against Powell to proceed over the renovation costs of the Federal Reserve building. Trump argued that the renovation should have been a $50 million fix, not a $3 billion overhaul. Reports revealed that Powell had been referred to the Department of Justice for alleged perjury relating to these expenses. During a recent visit to inspect the renovation, Trump urged Powell once more to lower rates, criticizing the Fed chief for his timing on key policy decisions. President Trump’s threats and pressure on the Federal Reserve could result in rate cuts, which are typically viewed as favorable for risk assets like Bitcoin and other cryptocurrencies. The latest Consumer Price Index data showed a 2.7% year-over-year increase in July, slightly below the anticipated 2.8%, with monthly CPI easing to 0.2% from 0.3%. Trump’s tariffs were reported not to have significantly impacted inflation, contradicting the Fed’s previous cautious stance on rate cuts. Stephen Miran, Trump’s Fed Board nominee, echoed the President’s views on inflation, stating that inflation has been stable at a 1.9% annualized rate under Trump’s administration. Miran’s remarks align with Trump’s stance, hinting at a potential shift in Fed policy towards easing sooner rather than later. The combination of political tensions, legal disputes, and softer inflation data places Powell in a challenging position. If rate cuts are implemented sooner than anticipated, the crypto market could witness increased momentum, with Bitcoin’s upward trajectory towards $121,000 possibly indicating investor anticipation for such a move.
Bitcoin Price Approaches $121K Amid Trump’s Legal Threats to Powell
