Donald Trump's attempt to dismiss Federal Reserve Governor Lisa Cook raises questions about the central bank's independence. Meanwhile, markets have reacted cautiously.
Political Pressure and Market Skepticism
Donald Trump heightened his confrontation with the Federal Reserve by attempting to fire Lisa Cook. This event raises questions about the Fed's independence; however, prediction markets show little belief that Trump will succeed in reshaping the central bank this year. According to Polymarket, the odds of Chair Jerome Powell being removed in 2025 are only 10%, while Cook faces a 27% chance of dismissal. Despite the dramatic headlines, investors see limited risk of leadership changes at the Fed before the year's end.
Bitcoin's Calm Response
Despite the historic nature of Trump's announcement, Bitcoin showed minimal movement. The largest cryptocurrency rose just 0.3% initially, with an overall decline of 1.72% in the past 24 hours. This muted reaction highlights how crypto markets are focusing more on macroeconomic signals than on political events. Analysts point out that if Powell were to be removed, it might open the door for potential rate cuts, which could boost risk assets, including Bitcoin.
Future Perspectives and Expectations
Markets continue to anticipate potential rate cuts before the end of 2025, and these expectations, rather than political disputes, will set the tone for digital assets. Traders are now monitoring inflation data and policy signals more closely than attempts by Trump to test Fed independence. This also reinforces the notion that Bitcoin, as a neutral asset, can remain unaffected by political influences.
Trump's attempt to remove Lisa Cook marks a significant moment in the Fed's history, yet markets are cautious in assessing potential consequences. Investor attention remains focused on macroeconomics and rate expectations, which may have a greater impact on cryptocurrencies than political drama.
