DXY Plummets Amid Trump’s Threat to Oust Powell, Bitcoin Rallies

The US Dollar Index (DXY) has fallen to a three-year low amid speculation of President Trump’s potential ousting of Federal Reserve Chairman Jerome Powell. This has led to positive impacts on Bitcoin’s price, which has surged due to the anticipated weakening of the dollar. Key remarks by economic officials highlight political tensions surrounding the Federal Reserve’s actions, with implications for both the dollar and cryptocurrency markets.

The US Dollar Index (DXY) has reached its lowest point in three years due to speculation about President Donald Trump potentially removing Federal Reserve Chairman Jerome Powell. The DXY has dipped below 99, landing at 98.2, its lowest since March 2022, prompting concerns among economists. Notably, economist Peter Schiff remarked on the dollar’s decline, pointing out significant rises in gold and the euro, indicating serious economic challenges ahead.

Statements from Kevin Hassett, the National Economic Council Director, have heightened tensions, revealing that the Trump administration is considering Powell’s removal. Hassett suggested that the Federal Reserve has acted in a politically biased manner under Powell’s leadership, critiquing interest rate changes as beneficial to the Democratic Party. This scrutiny arrives amid rising inflation and a sustained pause in interest rate cuts.

Trump has expressed dissatisfaction with Powell’s approach to interest rate adjustments. He highlighted delays in rate cuts compared to the European Central Bank and has called for Powell’s prompt removal, describing him as “always too late and wrong.” Such comments raise critical questions about the independence of the Federal Reserve and the impact of Powell’s potential ousting on global markets.

Should Powell be removed and interest rates lowered, this could spur a rally in the cryptocurrency market, as historically, a drop in interest rates weakens the US dollar, pushing investors towards assets like Bitcoin. The inverse relationship between the DXY and Bitcoin underpins this outlook, reinforcing the potential for Bitcoin gains amid a depreciating dollar. Recently, Bitcoin’s price surged to over $87,000, reflecting a 3.5% increase in just one day, as market anxieties intertwine with Trump’s future economic strategies.