Bitcoin surged 6% to trade above $93,000 on Wednesday after US President Donald Trump stepped back from threats to remove Federal Reserve Chair Jerome Powell and signalled a possible easing of tariffs on Chinese imports.
Speaking from the Oval Office on Tuesday, Trump said he had “no intention of firing” Powell.
He also suggested that the steep tariffs his administration imposed on China could be reduced, saying they “will come down substantially,” although he added they “won’t be zero.”
Bitcoin Breakout Follows Trump’s Retreat from Fed Showdown
The remarks marked a sharp shift in tone from earlier this week, when Trump labelled Powell a “major loser” and hinted at firing him. The president has repeatedly criticized the Fed for not cutting interest rates fast enough, despite nominating Powell to lead the central bank in 2017.
Markets responded swiftly. Bitcoin rose to $93,055, extending its gains to over 11% for the week. US stock futures also jumped, with the Dow, S&P 500 and Nasdaq futures climbing in after-hours trading.
Cryptocurrencies like Bitcoin tend to rally during times of perceived policy uncertainty or weakening confidence in traditional financial systems. Trump’s recent attacks on the Fed, paired with signs of political interference, have likely fuelled demand for decentralised assets that operate outside of central bank control.
Trump Retreats on Powell Threat After Market Jitters
Trump’s comments followed reports that National Economic Council Director Kevin Hassett had raised the legal question of whether the president could remove Powell, a move that spooked markets and drew concern from economists about undermining the Fed’s autonomy.
The Fed has maintained a cautious stance on further rate cuts, citing inflation that remains above its 2% target. Last week, Powell warned that the White House’s escalating tariffs could drive prices even higher. Trump responded by criticizing Powell’s stance and escalating threats to remove him.
On Tuesday, however, Trump walked back those statements, telling reporters: “The press runs away with things. No, I have no intention of firing him.”
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