Trump criticizes Powell for "acting too late," Fed chair candidate changes hint at policy shift

Trump’s public criticism of Federal Reserve Chair Jerome Powell once again pushes Fed policy into the spotlight. Meanwhile, the latest changes in the Fed chair nomination have triggered a market re-pricing of future policy directions, causing significant volatility in the crypto market due to policy uncertainty.

Behind Trump’s “Late” Criticism

Trump stated that Fed Chair Powell acted too late on interest rate issues. This assessment seems concise but reflects a deeper dissatisfaction with the pace of Fed policy.

According to the latest news, the landscape of Fed chair candidates is changing. Former Fed Governor Kevin Wirth’s chances have surged to about 60%, clearly leading over other candidates. In comparison, economic advisor Haskett’s odds have fallen to 15%-16%, with incumbent Waller at around 13%-14%. This shift essentially indicates an adjustment in market expectations for the future direction of Fed policy.

Candidate Changes Signal Policy Implications

Wirth, as a “hawkish” representative, contrasts sharply with Haskett’s “dovish” tendencies. Wirth’s lead suggests that markets expect the Fed to adopt a more tightening stance in the future. This echoes Trump’s criticism of Powell’s “acting too late”—implying that the next Fed chair may need to take more proactive policy actions.

Powell’s term ends on May 15, and Trump has stated he will announce a successor within this month. Although the final candidate remains uncertain, the significant rise in Wirth’s probability has become the main driver of market re-pricing.

How Policy Uncertainty Impacts the Market

This policy-level change has directly transmitted to the crypto markets. According to recent data, the crypto market experienced a notable correction on January 19:

• Bitcoin briefly fell below $92,000, down about $4,000 from the previous high of $97,000
• Ethereum dropped below $3,200
• The total 24-hour liquidation amount was approximately $860 million, with longs accounting for nearly 90%

Cumulative Effect of Trigger Factors

This decline was not caused by a single reason but by the accumulation of multiple factors:

1. The shift toward a “hawkish” stance in Fed chair candidate expectations, suggesting a possible tightening of monetary policy
2. Trump’s tariff threats against eight European countries, escalating geopolitical risks
3. The blockage of the crypto-friendly “CLARITY Act” in the Senate
4. A rapid rise in market risk aversion, with funds flowing into safe-haven assets like gold

Analysts point out that this is more of an emotional correction triggered by profit-taking at high levels. Options market data show implied volatility has only risen slightly, with weak willingness to chase gains and no significant increase in downside hedging demand, indicating market participants are adopting more cautious strategies amid high uncertainty.

Market Sensitivity to Policy Shifts

This adjustment clearly demonstrates the crypto market’s high sensitivity to Fed policy. Changes in Fed chair nominations and policy tilt are immediately reflected in asset prices.

It is worth noting that Fed policy direction not only influences the crypto market but also impacts the entire risk asset market. Gold and silver hit record highs during the same period, reflecting global investors’ flight to safety amid policy uncertainty.

Summary

Trump’s criticism of Powell, the “hawkish” shift in Fed chair nominations, and the subsequent market adjustments all point to the same trend: the Fed’s policy environment is undergoing significant change. The potential transition from dovish Powell to hawkish Wirth suggests that the Fed may adopt a more tightening stance in the future.

For the crypto market, this means reassessing how policy environments impact asset prices. In the short term, policy uncertainty will remain a primary driver of market volatility. Investors should closely watch when Trump announces the Fed chair candidate and what policy actions the new chair may implement.