Powell Removal Threat Hits USD, Treasuries & Crypto
Federal Reserve Chair Jerome Powell faces calls for removal amid political backlash over a $2.5 billion Fed HQ renovation. President Trump and Congress have criticized the plan, prompting an OMB probe and sparking “Powell removal threat” speculation. Potential successors include Scott Bessent, Kevin Warsh and Kevin Hassett, raising concerns over Fed independence.
Deutsche Bank warns markets have underpriced the fallout. A sudden removal could push the trade-weighted dollar 3–4% lower and Treasury yields up 30–40 basis points in a single day. Such a shock may drain liquidity from risk assets and trigger sharp volatility.
Crypto traders should track the Powell removal threat, dollar risk and Treasury yields closely. A chaotic Fed transition could unsettle markets and spark rapid reallocations in Bitcoin (BTC) and XRP, while any dovish pivot may later boost liquidity for digital assets.
Bearish
In the short term, the Powell removal threat is likely to be bearish for cryptocurrencies. A sudden leadership change could trigger a steep drop in the dollar and a spike in Treasury yields, draining liquidity from risk assets and heightening market volatility. This environment typically pressures digital asset prices as investors seek safer or more liquid holdings. Although a successor could adopt a more dovish stance—potentially boosting crypto in the medium term—the immediate uncertainty and shaken Fed independence are expected to weigh on crypto market sentiment and prices.