Fed rate cuts test: Trump pressures Warsh; Powell probe
Donald Trump said he would be disappointed if Fed chair nominee Kevin Warsh, once confirmed, does not deliver Fed rate cuts as soon as May. The central bank has not cut rates in 2026, and Trump framed Warsh’s speed as a key political and market test.
Trump also highlighted scrutiny around Fed chair Jerome Powell. Powell is facing a criminal probe related to Senate testimony about renovation costs for Federal Reserve buildings. Powell called the investigation “unprecedented,” while Trump suggested it began because the Fed resisted repeated White House pressure to cut rates.
On the Iran conflict’s impact, Trump expected a much larger sell-off than what occurred. He cited his belief that the Dow and S&P 500 could have fallen 20% (bear-market level) and that oil might reach $200, but observed oil stayed far lower (around $90 referenced in the interview) as supply routes adjusted.
Separately, U.S. retail sales rose 1.7% in March, but gas prices drove the gain and also pushed inflation back up. Consumer prices rose 3.3% year-on-year in March (from 2.4% in February), and monthly inflation increased 0.9%. Core inflation also rose to 2.6%. Higher fuel costs are expected to keep pressuring prices through energy and transport-linked spending.
For markets, the immediate focus is uncertainty over Fed rate cuts timing versus re-accelerating inflation, alongside geopolitical oil risks.
Bearish
This news is broadly bearish for crypto because it increases macro uncertainty at the exact point markets price rate expectations.
1) Fed rate cuts timing vs inflation: The article flags that Fed rate cuts have not happened in 2026, while gas-driven inflation re-accelerated (headline CPI 3.3% y/y and core 2.6% y/y in March). When inflation climbs, markets often delay rate-cut expectations or demand a “higher-for-longer” path—historically a headwind for risk assets like BTC and ETH. That’s a negative setup even if Trump is publicly pressuring for faster cuts.
2) Policy and legal risk around Powell: A criminal probe tied to Powell testimony adds headline risk and can raise the probability of abrupt policy communication shifts. Similar periods of Fed credibility/political controversy have often led to volatility in yields and USD, which tends to spill into crypto via tighter liquidity.
3) Geopolitical oil risk didn’t fully materialize—but remains a volatility amplifier: Trump’s expectations for deeper equity and oil downside were not met, yet oil and energy remain a key inflation channel. Even without a $200 oil scenario, the market still has to manage energy-price-driven inflation risk.
Short-term, expect higher volatility in crypto as traders react to inflation data and Fed narrative changes. Long-term, sustained inflation pressure would likely cap upside by keeping real rates elevated, even if geopolitical shocks fade.