The Fed holds rates near 3.6% as Trump demands deeper cuts, putting central bank independence under strain while Bitcoin, Ethereum and Solana trade as macro risk barometers.
Summary
- The Fed keeps its benchmark near 3.6% after three 2025 cuts, arguing growth and jobs have improved even as Trump pushes publicly for faster easing and vows to replace Powell.
- Powell faces a Justice Department probe over a $2.5B headquarters renovation and a legal fight over Trump’s attempt to fire Governor Lisa Cook, raising stakes for Fed independence.
- Bitcoin, Ethereum and Solana trade as high‑beta macro assets, with traders treating Trump–Fed tensions and the 2026 rate path as key drivers of liquidity and crypto risk appetite.
The Federal Reserve’s latest decision to hold interest rates around 3.6% leaves monetary policy frozen in place even as President Donald Trump intensifies his public campaign for deeper cuts. The pause underscores a widening gap between the White House’s appetite for cheaper money and a central bank determined to defend its independence.
Fed holds at 3.6%, Trump turns up heat
The Fed left its benchmark rate unchanged after three cuts last year, arguing that the economic outlook “has clearly improved since the last meeting” and that the job market is showing signs of stabilizing. Chair Jerome Powell noted that solid 4.4% annualized growth in the July‑September quarter suggests rates are “not so high that they are noticeably slowing growth.” Two governors, Stephen Miran and Christopher Waller, dissented in favor of another quarter‑point cut, with Miran — a Trump appointee — pushing yet again for more aggressive easing.
Trump, who has relentlessly assailed Powell for not slashing borrowing costs, is expected to name a new Fed chair once Powell’s term expires in May, a move that could redefine the balance between politics and monetary policy. The standoff echoes earlier clashes in which Trump demanded faster cuts even as advisers like Kevin Hassett publicly insisted the Fed “would remain insulated from political pressure.”
Independence on trial
The rate decision comes amid a Justice Department probe into a $2.5 billion renovation of the Fed’s headquarters and Powell’s related congressional testimony, an investigation the chair has bluntly described as a “pretext to punish the Fed for not cutting rates more quickly.” Powell also attended Supreme Court arguments over Trump’s attempt to fire Governor Lisa Cook, calling it “perhaps the most important legal case in the Fed’s history” and stressing he is “strongly committed” to preserving the central bank’s independence.
Hassett has warned that if monetary policy is “directed by political pressure or intimidation,” markets will question whether rates still reflect economic data rather than White House priorities. That threat matters for crypto as much as for Treasuries and equities, because digital assets continue to trade as the purest expression of macro risk appetite.
Crypto trades as macro risk
This parabolic move comes as digital assets continue to trade as the purest expression of macro risk appetite. Bitcoin (BTC) is hovering around $88,235, with a 24‑hour high near $90,476 and a low near $87,549, on roughly $32.8B in dollar volumes. Ethereum (ETH) changes hands close to $2,953, with about $23.4B in 24‑hour turnover and spot quotes clustered in the $4,500–$4,600 band on major exchanges earlier this week. Solana (SOL) trades around $192, up about 2.7% over the last 24 hours, with nearly $9.8B in volume.
For now, crypto markets appear to be taking the Fed’s pause in stride: recent coverage shows Bitcoin and XRP grinding higher as traders parse Powell’s messaging, even as altcoins like Solana remain highly sensitive to shifts in global risk appetite. Earlier this month, Trump signaled he had “no plan” to fire Powell “for now,” but left the door open — a conditional backing that keeps the Fed, and by extension rate‑sensitive crypto assets, trading under a permanent cloud of political risk.
Critically for Fed independence, the latest decision reinforces a pattern in which Powell and his colleagues insist on data‑driven policy while the White House openly lobbies for faster cuts. Trump’s evolving stance on Powell’s future and the investigation surrounding the $2.5 billion renovation have already become a central macro narrative for traders trying to price the path of rates into 2026. For crypto bulls betting that looser policy will eventually fuel another leg higher in digital assets, the Fed’s latest pause is less a turning point than a reminder that monetary policy — and the politics around it — remains the critical macro variable.
