Bitcoin (BTC) price hovers above $85K as Trump escalates pressure on Fed Chief Powell

Bitcoin price tethered near the $85,000 zone on Thursday despite bearish sentiment across global financial markets linked to the US-China trade war.

Bitcoin price remained above the $85,000 zone on Thursday despite bearish sentiment across global financial markets due to the U.S.-China trade war and rising macroeconomic uncertainty.

While equity markets faced sharp drawdowns, the flagship cryptocurrency showed resilience amid heightened political friction between the White House and the Federal Reserve.

President Donald Trump escalated criticism of Federal Reserve Chair Jerome Powell, suggesting a potential removal after Powell reaffirmed the Fed’s legal independence in a speech at the Economic Club of Chicago.

“We’re not removable except for cause. That’s stated in the Federal Reserve Act,” Powell said of his role, highlighting the central bank’s autonomy is protected by statute.

The comments followed a series of posts on Trump’s Truth Social account, where he slammed Powell’s policy direction as “a complete mess,” and accused the Fed of missing “a timely opportunity to reduce interest rates” despite falling inflation and commodity prices.

“The European Central Bank is cutting its main interest rate by a quarter of a percent, and they're already in negative territory. They're going down another notch, to minus 0.5 percent,” Trump said.

“With inflation down and commodities down, wouldn't it be nice if, after rapidly raising interest rates to fight inflation, the Fed could cut interest rates to help economic growth? But they can't, according to the Federal Reserve Act.”

The former president also claimed inflation was already “under control” and urged the Fed to lower borrowing costs to support economic growth.

“They have the ability to do it. They should do it. It’s time for the Fed to get back on track and start cutting interest rates to help our economy realize its full potential,” Trump said.

The president's remarks come as Treasury Secretary Scott Bessent is reportedly preparing to begin interviewing candidates to potentially replace Powell later this year, varying the outlook for the Fed’s policy direction.

How could Bitcoin react to Trump’s criticism of Powell

Interest rates play a pivotal role in shaping capital flows toward risk assets like Bitcoin. Lower interest rates typically drive investors to seek higher returns in alternative markets, including crypto, making any shift in Fed policy a crucial signal for Bitcoin’s trajectory.

If Trump successfully pressures the Fed into cutting rates sooner than anticipated, it could revigorate bullish momentum in Bitcoin and the broader crypto market.

Lower borrowing costs and increased liquidity may encourage institutional and retail investors to allocate more capital into digital assets, potentially driving Bitcoin toward fresh highs above the $90,000 level.

Such a move would also align with broader global easing trends, particularly if the ECB proceeds with further cuts.

On the other hand, if the ECB slashes rates while Powell opts for another pause, the divergence could create a temporary imbalance in capital flows.

This might strengthen the U.S. dollar in the short term, applying downward pressure on Bitcoin and other dollar-denominated assets.

In this scenario, Bitcoin could face renewed volatility and range-bound trading, especially if macroeconomic uncertainty persists around interest rates and inflation targets.