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WASHINGTON, D.C. — As inflationary pressures persist and the 2026 campaign cycle accelerates, the rivalry between former President Donald Trump and Federal Reserve Chair Jerome Powell has once again erupted—this time with interest rates, crypto deregulation, and personal insults all on the table.
Powell, testifying before the House Financial Services Committee on Tuesday, defended the Fed’s decision to hold interest rates steady, citing core inflation holding at 2.6% in May, still above the Fed’s 2% target. He also warned that Trump’s new tariffs could reignite inflation.
“It is also possible that the inflationary effects could instead be more persistent,” Powell said, refusing to give in to growing political pressure.
TRUMP’S FURY: “STUPID PERSON” AT THE FED
Trump, never one to pull punches, went on a tirade against Powell on Truth Social, calling him “too late” and “a stupid person.” At a White House press event, Trump complained that no tactic—"nasty or nice"—had moved Powell toward rate cuts.
“Am I allowed to appoint myself at the Fed?” Trump asked sarcastically. (No, he’s not. The Supreme Court recently affirmed that the Fed Chair is one of the few federal roles a president can’t fire.)
But Trump isn’t giving up. He’s pressuring Powell through his allies on the Federal Open Market Committee. Two key Fed officials — Michelle Bowman and Christopher Waller — have signaled support for a possible rate cut as early as next month, giving Trump a potential inside edge.
CRYPTO CHAOS: BOTH SIDES FEED THE FIRE
While Powell has stayed firm on monetary policy, his regulatory moves on crypto have left critics stunned — and in some cases, ironically aligned with Trump.
In April, the Fed quietly pulled back guidelines that restricted how banks handle crypto assets, under the banner of promoting “innovation.” This decision, paired with the GENIUS Act in Congress (heavily backed by the crypto lobby), threatens to further blur the line between speculative digital assets and the traditional banking sector.
“Crypto innovation adds nothing except for windfall profit for insiders and risk to the financial system,” one critic noted.
Even more concerning: the Fed this week dropped “reputational risk” from its bank supervision framework. The change will make it easier for banks to engage in high-risk, high-reward ventures without worrying about public trust or regulatory blowback.
WHO’S REALLY WINNING?
Trump is still incensed that Powell won’t bend to his will on interest rates — but oddly enough, he may be quietly getting his way when it comes to crypto deregulation and bank leniency.
So is Powell a defender of institutional independence? Or a deregulator hiding behind monetary restraint?
In today’s political climate, anyone who slows Trump down—even by accident—may be seen as an ally. But deregulating crypto and weakening bank safeguards doesn’t make Powell a hero. It makes this a very strange moment for U.S. economic policy, where two flawed forces clash—with long-term stability at risk no matter who wins.