With Jerome Powell's term at the Federal Reserve ending in 2026, President Trump appears to be gearing up for his succession. This move could profoundly influence US monetary policy, shaping the future landscape of American finance.
The American Federal Reserve (Fed) plays a crucial role in shaping the economic and financial policies of the United States. It is, therefore, a major point of interest for President Trump, who appears dissatisfied with the current chairman, Jerome Powell.
Recent reports suggest that Trump is seriously considering replacing Powell with Treasury Secretary, Scott Bessent. This surprising nomination, if confirmed, could significantly reshape American monetary policy.
Although Powell’s term is not set to end until May 2026, the President is eager to take action. He might even attempt to remove him from office before this deadline, despite potential legal obstacles.
Bessent, with his experience at Soros Fund Management and his support for stablecoins, could take a more accommodating approach aligned with Trump’s priorities: stimulus through increased liquidity.
White House insiders indicate that Trump could announce his decision by July 2025, forcing Powell into an early exit or a tense cohabitation.
Tensions between Trump and Powell have long been apparent. The President has repeatedly criticized the Fed’s policies, especially for not lowering interest rates swiftly enough.
By naming Bessent as a potential successor now, Trump seems keen to act sooner than expected. A way to influence the course of American monetary policy in the months ahead.
Bessent, pro-CBDC and anti-CBDC (central bank digital currency), could favour BTC and ETH, aligning the Fed with a pro-crypto stance. However, excessively low rates could risk fueling inflation (CPI at 2.5% in May 2025), necessitating a delicate balance.
Nevertheless, this decision will not be without consequences. The Supreme Court recently ruled that the President cannot dismiss the Fed chair at will, given the unique status of the institution. A legal confrontation could ensue, with potentially significant implications for financial markets.
The quasi-independent status of the Fed poses a challenge. The Supreme Court’s decision limits Trump’s powers, and unilateral dismissal could be contested in court, with a verdict expected by late 2025. Democrats, through the Senate, could also block Bessent’s nomination, requiring 51 votes (Trump has 53 Republican senators).
Regardless of the outcome of this power struggle, it is evident that the White House is actively paving the way for a major change at the helm of the Federal Reserve. With Bessent or another candidate, Trump appears determined to leave his mark on American monetary policy.
Beyond political considerations, this leadership change at the Fed could have significant implications for the economy and financial markets, including the cryptocurrency sector. Investors and industry players would do well to closely monitor this development.
Charles Ledoux is a Bitcoin and blockchain technology specialist. A graduate of the Crypto Academy, he has been a Bitcoin miner for over a year. He has written numerous masterclasses to educate newcomers to the industry and has authored over 2,000 articles on cryptocurrency. Now, he aims to share his passion for crypto through his articles for InvestX.
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