Can Trump Fire Powell? Federal Reserve Chair Jerome Powell Testimony fielded questions at Congress on everything from inflation to rate cuts for a second Day.

Over two days of testimony, Federal Reserve Chair Jerome Powell fielded questions from Congress on everything from inflation and monetary policy to crypto banking and the Fed’s autonomy. His careful yet telling responses outlined the central bank’s current priorities and future direction.

But first, let’s take a quick look at the market – here’s the state of the crypto in 2025 so far:

J Powell Speaks -> Prices Down.
Trump Memecoin -> Prices Down.
Trump Inauguration -> Prices Down.
Deep Seek AI -> Prices Down.
Trade Tariffs -> Prices Down.
Crypto And Digital Assets Press Conference -> Prices Down.
BlackRock announces EU BTC ETF -> Prices Down.

All these events make Bitcoin dump. How does that make you feel? Me? Not good.

Jerome Powell: ‘We Aren’t There on Inflation’

(X)

Inflation took center stage during Powell’s testimony, spurred by a recent CPI report showing inflation hitting 3%. While acknowledging progress, Powell stressed the Fed’s determination to push it lower, declaring, “We are close but not there on inflation.”

Speaking to the Senate Banking Committee, Powell confirmed the FOMC’s intent to maintain restrictive rates for now, noting, “We want to make more progress on inflation.” Similar remarks to the House underlined the Fed’s cautious stance, with no rush to ease interest rates in a stable

“We’re in a pretty good place with this economy,” Powell said. “With inflation taking time to align with our 2% target, our restrictive stance remains appropriate.”

The US government has stolen 26.1% of your purchasing power since 2020 through inflation.

If you’re not making over 26.1% more money than 2020, you’re poorer.

If your net worth hasn’t risen by 26.1% since 2020, you’re poorer. pic.twitter.com/8suyqUz7pD

— Darth Powell (@VladTheInflator) February 12, 2025

The hearings turned to crypto banking, with Jerome Powell addressing safeguards against a meltdown involving major crypto issuers. He stressed the importance of banks grasping the risks tied to crypto ventures.

“It’s appropriate to ensure that banks engaging in crypto activity understand the risks involved,” he said while warning regulators to avoid overcorrection. “You don’t want to go too far. These activities already operate within a framework where banks understand, and we understand, what they’re doing.”

Independence of the Federal Reserve: Can Trump Fire Powell?

The hearings also turned to the Federal Reserve’s independence, with Powell drawing a clear line on presidential influence. Responding to spats with former President Trump, who repeatedly criticized Fed policy, Powell underscored that the law shields the central bank from interference

(Jerome Powell)

During the hearing, Sen. Jack Reed (D-R.I.) asked Powell if the president could oust Fed board members, referring to recent Kennedy Center events. Powell shut it down. “It’s pretty clearly not allowed under the law,” he said, stressing that the Fed won’t bow to political interference.

Quantitative easing found its way into the discussion, with Powell clarifying that it’s a tool reserved for dire situations. “Quantitative easing is a tool we only use when rates are already at zero,” he said, addressing concerns over its risk of spurring inflation or devaluing the dollar.

Powell held a careful line on tariffs, particularly those aimed at China. He acknowledged trade complexities, noting that free trade principles still apply—though not as seamlessly when a major global partner “doesn’t really play by the rules.” Yet, he maintained, “It’s not the Fed’s job to make or comment on tariff policy.”

Takeaways from Jerome Powell’s Testimony Day 2

This week’s testimony laid Powell’s priorities bare—tackling inflation, anchoring monetary policy, and holding the line on the Fed’s independence. He also addressed crypto’s uneasy merger with conventional finance while threading the needle between transparency and economic stability.

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