Trump steps up public pressure on Fed chair Jerome Powell to slash interest rates — a direct challenge to the Federal Reserve’s recent decision to hold rates and signal only one cut for all of 2026. The clash has immediate implications for crypto markets already grappling with an oil-driven inflation shock.
What happened
- At its March 18 meeting the Fed left the policy rate at 3.50%–3.75%, flagging increased uncertainty from the Iran conflict and lingering effects of a 15% global tariff regime. Chair Jerome Powell said a further move up is unlikely but “will need to assess how enduring this situation is” — not an outright commitment to cuts.
- The Fed’s updated forecasts are expected to lift inflation projections, with many economists now penciling in inflation near 3% by late 2026 — a level that makes meaningful rate cuts harder to justify.
Trump versus the Fed
- U.S. President Donald Trump has publicly urged Powell to bring rates down sharply — reportedly pushing for cuts as low as 1% — and ramped up criticism after Iran’s war began on Feb. 28. On March 12 he used Truth Social to demand immediate easing from Powell. The reporting of this escalation was picked up by Jinshi.
- Trump has also nominated Kevin Warsh to succeed Powell when his term ends in May; the pick was seen as potentially more dovish, but the Iran crisis could complicate or delay that transition.
How markets are reacting — crypto in focus
- Crypto traders are already pricing the tug-of-war into prices. Bitcoin slipped back below $70,000 after briefly reaching the mid-$73,000s last week; Ethereum has faded toward the low $2,200s.
- Markets are pricing in barely a single cut for 2026; CME FedWatch shows over a 99% probability of no change at the current meeting. Wall Street and forecasters — including Oxford Economics’ Lydia Boussour — have moved to a baseline that assumes only one 25-basis-point cut in 2026, and acknowledge it’s plausible the Fed won’t cut at all next year.
Why this matters for crypto
- The debate creates two competing crypto narratives: if Powell caves and real yields fall, crypto could play a stagflation hedge and rally; but if the Fed holds rates (or tightens) amid an oil shock, higher-for-longer borrowing costs could sap liquidity and turn crypto back into a high-beta risk asset.
- The oil shock is central here. Brent crude is trading above $110 as Iranian strikes widen on Gulf energy infrastructure — erasing the earlier inflation buffer that lower energy prices provided. That reduces the Fed’s room to maneuver while pushing inflation expectations higher.
What to watch next
- Fed communications and any change in forecasted inflation or rate-path commentary.
- Oil market developments and the geopolitical situation in the Gulf.
- How market-implied rates via Fed funds futures evolve, which will drive risk appetite across both TradFi and crypto.
Bottom line: The political push for aggressive easing collides with real-time inflationary pressures from an oil shock. For crypto investors, the outcome will likely determine whether digital assets ride a stagflation hedge narrative or get knocked down by a higher-for-longer rates regime.
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