Fed leadership under fire as Fitch warns, Bitcoin traders brace
Political pressure on Fed leadership has escalated as Republicans file criminal complaints and debate ousting Chair Jerome Powell. Representative Anna Paulina Luna petitioned the Justice Department to investigate Powell for allegedly lying under oath about a $2.5 billion Fed building renovation. Despite denials from President Trump and Senate leaders, calls for interest-rate cuts and more tariffs persist.
Meanwhile, Fitch Ratings warned that U.S. growth is slowing, cutting its 2025 GDP forecast from 1.5% to 1.2%, and predicting high-yield bond defaults rising to 4.5% and leveraged loan defaults up to 6%. Fitch also flagged the debt-to-GDP ratio climbing toward 135% by 2029.
Bitcoin dipped from $118,391 to $117,660 as traders factor in the uncertainty around Fed leadership and potential shifts in U.S. monetary policy. Crypto traders should monitor these developments closely, as ongoing political interference could heighten market volatility and influence Bitcoin’s short-term trajectory.
Bearish
The mounting political pressure on Fed leadership and Fitch Ratings’ warning of slowing growth create an environment of uncertainty that typically weighs on Bitcoin. In the short term, traders have already driven Bitcoin down from about $118,400 to $117,660, reflecting immediate selling pressure as investigations and possible policy shifts loom. The risk of politically influenced rate decisions and higher debt levels could sustain volatility. Over the long term, any erosion of Fed independence or delayed rate cuts may undermine market confidence, exerting continued downward pressure on Bitcoin’s price. Conversely, a definitive policy path might eventually reduce volatility, but until then, the outlook remains bearish.