The Fed may pause rate hikes amid political and economic risks, as Trump pushes for a more aligned monetary policy with his economic goals.
Welcome to the US Crypto News Morning Briefing — your essential rundown of the most important developments in crypto for the day ahead.
Grab a coffee — you’ll need it. The financial market became much more unpredictable due to creeping inflation, political power plays, and market jitters. As the Federal Reserve (Fed) holds steady, new reports suggest the next big shift may come not from data, but from Donald Trump.
The Fed’s preferred inflation gauge, PCE (Personal Consumption Expenditures), rose in May. According to the latest data, the Core PCE Price Index rose 0.2% month-over-month (MoM) and 2.7% year-over-year (YoY), slightly above forecasts.
Headline PCE came in as expected, rising 0.1% on the month and 2.3% YoY
Like the US CPI, this is the first rise in PCE inflation since February. Against this backdrop, experts anticipate the Fed pause to continue.
Based on the CME FedWatch Tool, there is a 79.3% probability of the Fed keeping interest rates unchanged in the July 30 meeting.
Further, signs of weakening consumer momentum emerged as personal income fell 0.4%. Meanwhile, real personal spending declined 0.3%. Both of these US economic indicators missed forecasts, reflecting softening economic conditions.
While these inflation numbers reinforce the Fed’s cautious stance, political drama overshadows them. The growing possibility that President Donald Trump could soon install a MAGA-aligned Federal Reserve chair continues to shake financial markets.
In his recent testimony before the Senate Banking Committee, Fed chair Jerome Powell said he expects inflation to increase this summer because of the Trump administration’s tariffs.
Meanwhile, reports indicate that Trump is considering replacing Powell with a loyalist as early as this summer.
While his term ends in May 2026, the move would undercut Powell’s final year in office, potentially injecting political risk into an institution long prized for its independence.
The political maneuvering triggered a sharp reaction in the currency markets, sending the US dollar to a three-year low. The dip comes amid fears of a politicized monetary policy environment ahead of 2026.
Trump, frustrated by Powell’s refusal to cut interest rates, has escalated his rhetoric, as indicated in previous US Crypto News publications.
In recent weeks, he’s called Powell the “WORST” and a “dummy” who is “costing America $Billions.” Behind closed doors, insiders say Trump is vetting candidates who would be “unstintingly loyal” and willing to implement rate cuts aligned with his economic agenda.
Reacting to the news, the US Dollar Index (DXY) is trending lower, revisiting levels last seen in 2022.
As inflation reawakens and spending slows, markets grapple with a new risk: that monetary policy could once again be steered by political loyalty rather than economic logic.
Here’s a summary of more US crypto news to follow today:
