Trump’s public confrontation with Federal Reserve Chair Jerome Powell over interest rates has intensified as crypto markets surged past $4.1 trillion, driven by Bitcoin, Ethereum, and XRP price gains [1]. The U.S. president, known for his sharp rhetoric against the Fed, reiterated his stance that interest rates must be cut immediately, writing on Truth Social that Powell’s delayed response has caused “inestimable damage” to the economy [1]. These comments, combined with Trump’s announcement of considering legal action against Powell related to the Fed’s Washington headquarters renovations, further fueled bullish sentiment in crypto markets [1].
Bitcoin prices edged closer to its all-time high of $123,000, hitting nearly $121,000, a 2% increase from the previous 24 hours [1]. Meanwhile, Ethereum approached its record high of $5,000 per ether, rising 10%, while Solana surged 15% and XRP climbed 5% [1]. Meme coin Dogecoin also saw a 12% jump. This market outperformance has led many to believe the long-anticipated “alt season,” in which altcoins outperform Bitcoin, is now underway [1].
Trump’s public criticism of Powell has created a political backdrop influencing market psychology. White House spokesperson Karoline Leavitt confirmed the president is evaluating legal options against Powell, signaling continued tensions that may impact Fed policy and investor expectations [1]. The latest U.S. inflation data, which showed an easing trend, has increased the likelihood of a 25-basis-point rate cut in September, according to CME’s FedWatch [1]. This potential shift in monetary policy has traders positioning for a crypto rally, particularly if lower interest rates boost risk-on assets [1].
Axel Rudolph, a senior technical analyst at IG, noted that the Ethereum price rally appears unstoppable as traders react positively to the recent U.S. inflation data [1]. The market now appears to be pricing in a Fed rate cut, reversing Powell’s earlier decision to hold rates due to concerns over Trump’s proposed tariffs and their potential inflationary impact [1]. With the July CPI report expected to show a year-on-year rise of 2.8%, the data will be closely watched for clues about the Fed’s next move [1].
Despite the optimism, some analysts remain cautious. Alex Kuptsikevich, FxPro’s chief market analyst, warned that Bitcoin’s recent pullback—losing nearly 3% after an initial 3.5% jump—may signal a repeat of July’s volatile pattern [1]. He attributed the correction to the cautious behavior of institutional investors ahead of key inflation data [1].
Looking ahead, crypto analyst Nic Puckrin emphasized that the market is likely to remain in a range-bound pattern for the next six to eight weeks, with uncertainty over the Fed’s rate decision, the next chairperson, and unresolved global trade issues acting as key headwinds [1]. However, he added that a September rate cut and clearer trade policy could create favorable conditions for a new crypto rally, potentially pushing Bitcoin back above its all-time high [1].
The broader market is now betting heavily on the Fed’s response to the latest inflation data and how it will shape the future of monetary policy. Trump’s ongoing war of words with Powell and his push for a more aggressive rate cut strategy may continue to influence both political and financial markets, with crypto assets standing to benefit from a shift in Fed policy [1].
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[1] Source: Forbes: [Forbes Digital Assets](https://www.forbes.com/sites/digital-assets/2025/08/13/bitcoin-on-the-brink-as-crypto-braces-for-fed-price-bombshell/)
