Things just got real in Washington. The NYT reports that Jerome Powell is officially under criminal investigation. Despite the pressure from the White House, Powell has stated he will not step down or be intimidated.
Why this matters:
We are seeing an unprecedented clash between the Executive branch and the Federal Reserve.
Institutional stability of the USD is being questioned in real-time.
For many, this confirms why a decentralized "Plan B" (Bitcoin) is necessary.
Is this the moment where the independence of the Fed finally collapses?
Would be great, but doubt it.
The war between Treasury and Fed has been heating up over last decade. This is just over debt. Both the high interest rates held by Powell (justifiable in my view) and the lack of US banks being a net buyer of new Treasuries.
The banks "got what they wanted" (they removed all the requirements to hold Treasuries during Covid), thus they are not net buyers of debt anymore.
I think the Treasury / Fed relationship could've survived one of those things, but not both. The combination of Fed holding high interest and simultaneously not buying debt is what has cratered it.
I heard recently Trump claim he thinks 1% interest rates is fair....hahahaha...Imagine loaning someone $100 and making $1 over the next year. Regardless, its a good time to hold Bitcoin.