Jerome Powell’s future at the helm of the Federal Reserve is facing fresh uncertainty. While President Trump has not formally removed him, the moves taking place around the central bank suggest a shift in direction. 

From regulatory rollbacks to planned staffing cuts, the Fed is changing. Powell, whose term ends in May 2026, finds himself presiding over an institution that is slowly but surely being reshaped from within.

Quiet Structural Changes Under Trump’s Watch

The current administration has not needed to fire Jerome Powell to change the Federal Reserve. Instead, Trump’s approach has focused on shifting personnel and priorities behind the scenes. 

Treasury Secretary Scott Bessent recently made it clear that the administration aims to question the core purpose of the central bank, criticising what he sees as academic excess within the institution.

This comes at a time when Powell’s leadership is under more pressure than ever. While the Fed remains formally independent, Trump has managed to place allies in key roles. 

Michelle Bowman’s promotion to vice chair in charge of US bank regulation is one clear sign of this new direction. 

Her stance in favour of deregulation aligns closely with the administration’s broader economic strategy.

These moves suggest that Powell, while still officially leading the Fed, may have diminishing influence over the long-term direction of the institution. 

Read also: Who Will Replace Jerome Powell?

Trump’s team has not hidden their dissatisfaction with the Fed’s large footprint and regulatory reach, and their actions now reflect that sentiment.

Powell, a seasoned policy-maker with experience across different political cycles, appears to be navigating this moment with caution. 

However, with new appointments and a push to review long-standing policies, his role may shift from being a driver of policy to merely a steward of change already in motion.

Interest Rate Strategy and the Political Undercurrents

The next Federal Reserve interest rate decision is scheduled for Thursday, July 31, 2025, and the market expects the rate to remain unchanged at 4.5%. 

While Powell will still be delivering the decision and addressing the press, the tone surrounding the announcement is anticipated to reflect growing political influence.

In recent months, Trump officials have expressed strong opinions about the Fed’s current monetary stance. Scott Bessent openly criticised the central bank for running ongoing financial losses and maintaining high interest costs linked to debt holdings. 

With inflation still lingering and the economy showing mixed signals, Powell’s efforts to find balance may be increasingly constrained by the political climate.

This interest rate decision is not just another monetary policy update. It arrives as the Fed is being reoriented both structurally and ideologically. Powell’s usual cautious tone in press conferences will likely be scrutinised more than ever. 

The administration may be looking for signs that he will begin signalling rate cuts in the coming months, aligning with Trump’s desire to boost business and consumer activity ahead of the 2026 elections.

Read also: Trump vs Powell

Markets have already begun pricing in a potential shift. A reduction in regulatory pressure and the possibility of looser monetary policy under a reshaped Fed could lead to volatility across both traditional and digital assets. 

For Jerome Powell, this moment is not only about economic stability but also about maintaining the Fed’s independence in the face of increasing political intrusion.

Downsizing the Fed and the Future of Its Leadership

One of the more significant moves under Powell’s leadership has been the plan to reduce the Federal Reserve’s workforce by 10%. 

The memo he issued in May cited general efficiency goals in line with broader government policies. However, some analysts believe this may also be a pre-emptive step to avoid deeper cuts being imposed by the administration later on.

Trump allies, including potential future Fed chair candidate Kevin Warsh, have hinted that the reduction may not be enough. Describing parts of the Fed as “deadwood,” they argue for a more aggressive downsizing. 

Powell now finds himself trying to preserve the institution’s credibility while fending off both internal and external criticism.

The situation is complicated by the Fed’s recent $220 billion loss, mainly due to the costs of managing its balance sheet while keeping interest rates high. 

While these are structural challenges that were necessary to combat inflation, the optics have added fuel to the administration’s push for reform.

Jerome Powell’s tenure may continue officially until May 2026, but in practice, his ability to lead with full autonomy is being tested now. As Trump reshapes the Fed’s leadership and operations, the institution’s future may look very different by the time Powell’s term ends. 

Whether he stays or steps down earlier remains a lingering question, especially as pressure mounts both from within Washington and the broader market.

Read also: Will Trump Fire Jerome Powell? Inside the Fed

Conclusion

Jerome Powell is entering what may be the most pivotal period of his career. As President Trump gradually redefines the Federal Reserve without formal removal, Powell’s influence is at risk of being diluted. 

With major interest rate decisions and structural reforms ahead, his challenge is not just economic but institutional. 

For traders and investors navigating these uncertain times, using platforms like Bitrue can offer a safer and simpler way to stay exposed to market movements and digital assets.

FAQ

What is Jerome Powell’s current role at the Federal Reserve?

Jerome Powell is the Chair of the Federal Reserve and is set to serve until May 2026 unless he resigns or is removed earlier.

Is President Trump trying to fire Jerome Powell?

No, Trump has not attempted to fire Powell directly. Instead, he is influencing the Fed through personnel changes and structural reforms.

What are the expected changes at the Federal Reserve?

The Fed is seeing a shift towards deregulation, downsizing of staff, and potentially looser monetary policy under new leadership.

Will the interest rate change soon?

The next interest rate decision is expected to keep rates at 4.5%, but future changes may depend on inflation data and political pressure.

How do these changes impact crypto markets?

Institutional changes at the Fed can increase volatility across all risk assets, including crypto. Traders are watching closely for policy shifts that could affect liquidity and sentiment.

Investor Caution 

While the crypto hype has been exciting, remember that the crypto space can be volatile. Always conduct your research, assess your risk tolerance, and consider the long-term potential of any investment.

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