On April 15, 2026, in the afternoon Eastern Time, U.S. President Trump issued a latest warning in public: if Federal Reserve Chairman Powell does not "leave on time" after his term ends in May, he will use presidential authority to dismiss him. This statement directly coincides with the timeline—briefings show that Powell's chairmanship will officially end in May 2026, and the market pricing probability for his nominated successor, Walsh, to officially take office before May 15 is only about 43%, bringing the possibility of a personnel vacuum to the forefront. The long-standing tension between executive power and central bank independence was instantly ignited by the threat of "if you don’t leave, you’ll be fired," and the institutional consensus of the dollar system came under pressure, leading traders to reassess risk premiums while market sentiment clearly shifted to tense.
From Renovation Project Investigation to Escalation of Dismissal Threats
This palace coup did not come out of nowhere; its political narrative origin points to the renovation project at the Federal Reserve headquarters. The project was handed over to the Justice Department for investigation due to engineering-related issues, which could have been seen as a technical, procedural compliance review, but was rapidly politicized and magnified in Trump's discourse. As the briefings did not disclose the details and amounts of the charges, the only facts that can be confirmed by the outside world are: the renovation project has entered judicial procedures, becoming an entry point for attacks on the governance of the Federal Reserve.
In public interviews, Trump frequently used the phrase "must investigate thoroughly" to package an engineering compliance issue as a question regarding the overall integrity and decision-making reliability of the Federal Reserve. As the focus of discourse shifted from "the project must be investigated" to "the personnel must be changed," the emphasis gradually slid from the case itself to a crisis of trust in Powell and his leadership team. The topic of investigation was intentionally linked to monetary policy, forming a complete path from judicial investigation to public judgment to personnel pressure.
The key to this operation lies in transforming what should be clarified by auditing and supervision into a political inquiry regarding the legitimacy of monetary decision-making. Once the "renovation project" was packaged as a symbol of the Federal Reserve's mismanagement, the subsequent demand to "replace the chairperson" could be framed as an inevitable choice for "restoring order." Thus, balance sheets and interest rate paths, which should be based on data and professional judgment, were pulled into the narrative battlefield of partisan struggle, providing ammunition for forcibly intervening in monetary policy.
The President Takes Action Against the Central Bank: Legal Boundaries Are Stretched
At the institutional design level, Powell's chairmanship will expire in May 2026, while his term as a Federal Reserve Board member will continue until 2028. This inconsistency in "position caps" was originally intended to weaken the direct impact of short-term political changes on monetary policy through a longer board term, ensuring continuity for the central bank during cycles but also leaving ambiguous space under special circumstances.
When the situation of "the chairperson's term has expired but is still the current board member" genuinely arises, gray areas will appear at the legal and customary levels: can the chairperson continue to preside over certain work in the interim as a board member, how will internal roles be reassigned, does the president have the authority to prematurely dismiss the current chairperson while retaining their board member status, etc., all exceed the clear boundaries of rare precedents. The briefings clearly marked the lack of details on the "legal basis for continuing to serve as acting chair," indicating that even the legal profession finds it difficult to quickly provide an uncontroversial answer.
Against this backdrop, Trump's choice to publicly state on April 15 that "if you do not leave on time, you will be fired" is itself seen as a pressure test on the bottom line of central bank independence. Within the U.S. constitutional framework, the president nominally nominates and can dismiss officials under specific conditions, but the long-standing convention is to maintain a high degree of restraint on senior Federal Reserve officials to protect monetary policy from short-term electoral impulses. Once the threat of dismissal becomes a public negotiation chip, it is not just a question of whether a single case touches constitutional provisions but also tears at the historical precedents: any future president might cite this case to find "political legitimacy" for intervening in interest rate paths.
The Uncertainty of Walsh's Succession and the Risk of Policy Continuity
The current market expectations for the successor are similarly filled with uncertainty. According to the briefings, the probability that Walsh, the candidate nominated by Trump, will officially take office before May 15 is only about 43%, meaning that before the term is up, factors such as "will the Senate complete hearings and votes" and "will procedures be tugged by politics" are all included in traders' risk models. Personnel confirmations are not just formal processes, but directly tied to interest rate expectations and the credit of the dollar.
If an extreme but not impossible combination occurs—Powell leaves his chairperson position as scheduled, but Walsh fails to take office on time due to procedural delays, there will be a vacuum period in the highest position of the Federal Reserve nominally. Although there are acting mechanisms and collective decision-making frameworks within the Federal Reserve system, in the market's mindset, a "faceless transition" raises questions about the timing of the next interest rate decision: will it be passively delayed, will the established dot plot continue to be implemented, or will the "acting spokesperson" release new signals during an extremely sensitive window period?
In a scenario with multiple personnel paths, the forward guidance of monetary policy will also be forced to diverge: if Powell resigns on schedule and Walsh successfully assumes office, the outside world will focus on whether the new chairperson will continue or slightly adjust the original path in the context of easing inflation; if Powell is forced to leave early and the successor is long undecided, the tone of the FOMC statement, the dot plot, and the information volume during press conferences may be forced to retract to avoid releasing excessive directional guidance in the authority vacuum. Each personnel combination signifies a different form of repricing of the U.S. dollar interest rate curve.
Inflation Eases, Yet Faces Political High-Pressure Tests
Ironically, based on macro data, this should be a relatively "mild" and controllable cyclical adjustment. High-level officials in the U.S. Treasury—Secretary Yellen emphasized in public, "core inflation is on a downward trend," which means that after excluding energy and food, price pressures have receded from their peaks, providing macro background support for the Federal Reserve to make slight adjustments in the pace during future meetings, maintaining a gradual path.
However, the stabilization of the economic front and the rise of political risks form a stark mismatch. On one side, there is marginal easing of inflationary pressures and no hard landing alarms in employment; according to conventional logic, the monetary committee could manage expectations comfortably through communication; on the other side, the president is publicly exerting pressure in front of live cameras, and the Justice Department's investigation is framed as a political symbol of "must investigate thoroughly," continually drawing technical discussions of monetary policy into the struggle for identity and power.
In this dislocation structure, market participants are forced to shift their focus: during evident declines in inflation, the traditional question is "how to decide"—should it be a faster or slower decrease or extend the duration of high-interest rates; whereas now, what traders are more concerned about is "who will decide": whether those who will host press conferences and call the shots in times of crisis over the next year still possess relatively independent and stable institutional endorsement. This unrest regarding the "identity of decision-makers" itself will be reflected as a higher risk premium in asset prices.
Under Macroeconomic Uncertainty, Synchronization and Amplification of Market Sentiment in Cryptocurrency
Along with frequent changes in macro narratives, the on-chain world has also exhibited similarly rhythmic anomalies. The briefings noted that the large-scale destruction of WLFI tokens occurred around the same time as the current uncertainties surrounding the Federal Reserve. Although the briefings did not provide details of the destruction mechanism, scale, and project motivation, nor did they specifically describe the technical aspects, the temporal parallel was enough for sensitive funds to interpret the two within the same emotional coordinate system.
In the usual market context, token destruction is often packaged as a positive factor, as it reduces supply and increases the scarcity of individual tokens to attract speculative funds. However, when this action overlaps with macro noises such as "instability at the central bank's high levels" and "politicization of judicial investigations," some traders view it as a hedge against uncertainty: on one hand, the project side releases a signal of "I am present and taking action" through destruction; on the other hand, on-site funds may use this to conduct short-term setups in various directions under high volatility expectations, interpreting originally neutral or even mildly favorable on-chain behavior as a vehicle for a dual pull of hedging and speculation.
Historical experience repeatedly shows that unexpected macro policy events are often the catalysts that amplify the volatility of crypto assets. From traditional financial regulatory statements, black swan referendum results, to unexpected central bank meeting minutes wording, as long as they touch upon the nerves of "fiat credit" and "liquidity expectations," Bitcoin and its surrounding assets often give a high β response first. This time, the combination of Powell's fate and the investigation turmoil provides a familiar reference for the current market conditions: as external uncertainty rises, any signals interpreted as value repricing or chip restructuring on-chain will be examined under higher resolution.
After Powell's Fate: Dual Pricing of the Dollar and Cryptocurrency
In summary, the recent wave surrounding Powell's fate has brought the long-standing conflict between administrative power and central bank independence to the forefront. In the short term, it raises the political risk premium of dollar assets, causing turbulence in the pricing of the interest rate curve and risk assets; in the long term, it engraves a new coordinate into institutional memory—the political costs and technical paths for future presidents' "interventions" in the Federal Reserve may be reevaluated based on this reference.
From a path perspective, at least three key scenarios exist: first, Powell smoothly leaves his chairperson position in May as planned, and Walsh takes over according to procedure, ensuring relative continuity in personnel and communication at the Federal Reserve, with market volatility reflecting more on assessing the new chairperson's style; second, under political pressure, Powell is forced to leave early; even if his board member status is retained institutionally, it is still viewed by traders as a substantive weakening of central bank independence; third, a "strong board member mode" transition occurs—where the chairperson position remains undecided for a period, temporarily managed by the current board collectively, further amplifying doubts about policy forward guidance and the authority of press releases.
For U.S. dollar credit, the key in the medium term is not only whether inflation continues to decline but also whether the market believes "interest rate decisions are still primarily driven by data, not politics." Once the latter prevails, the demand for hedging and diversification in global asset allocation will naturally rise. In terms of cryptocurrency assets, the increase in macroeconomic uncertainty often leads to polarization of risk appetite: on one end, Bitcoin is viewed as a "hedge against fiat currency risks" by long-term funds, while on the other end, leverage and options funds flood in for short-term speculative plays under high volatility expectations. In the coming months, personnel developments, the direction of judicial investigations, and the rhythm of interactions between the White House and the Federal Reserve will all become key variables affecting the rise and fall of these two forces.
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