Investor confidence in the crypto markets received a boost as the perceived likelihood of Jerome Powell’s removal as Federal Reserve Chair diminished significantly, according to data from prediction markets.
The odds of Powell leaving his post before 2025 have fallen to just 14%, a sharp decrease of 9 percentage points within a single day. This shift in sentiment follows reassuring comments from President Donald Trump, who stated he does not plan to replace the Fed Chair.
This declaration marks a notable change from recent weeks, where speculation was rife about potential replacements for Powell amid disagreements over monetary policy. Trump had previously expressed a desire for more aggressive interest rate cuts.
Reports had circulated regarding interviews for Powell’s potential successor, fueled by comments from Treasury Secretary Scott Bessent and ongoing debates about the pace of rate adjustments, especially in light of newly imposed trade tariffs.
Powell has consistently advocated for a measured approach to monetary policy, emphasizing patience and resisting calls for rapid rate cuts while adjusting the Fed’s economic projections for 2025 downward.
The reduced uncertainty surrounding Fed leadership has calmed nerves across financial sectors. Stability at the central bank is often seen as crucial for reducing volatility in both traditional equities and digital assets.
Cryptocurrency markets reacted positively to the eased tensions. Bitcoin (BTC) climbed above the $93,000 mark, reaching its highest value in several weeks. This rally was also supported by indications of a less aggressive stance from the U.S. on trade tariffs with China.
Reflecting the improved mood, the Crypto Fear and Greed Index surged 25 points to 72, entering the “Greed” zone. This suggests a growing risk appetite among participants in the blockchain space.
With approximately 13 months left in Powell’s current term, Trump’s recent backing provides a degree of stability. Analysts note that sustained clarity on economic policy from the administration will be vital for maintaining positive investor sentiment moving forward.