A resignation letter claiming to be from Federal Reserve Chairman Jerome Powell has created a stir on the internet, sparked confusion, and feverish market speculation. As per the letter, Powell is stepping down due to rising tensions with U.S. President Donald Trump.
However, this document seems to be entirely fabricated via AI, and Powell has not resigned. The letter has a blurry, unreadable stamp that appears to be fake and possibly AI-generated. The goal may be to affect financial markets, especially the highly sensitive crypto market.
Recently, President Trump has been lobbying Fed Chair Jerome Powell to lower interest rates to support the economy. However, Powell has rejected this, preferring to keep inflation under control while preserving the Fed’s authority. Trump stressed that he would only do so if there was fraud. This ongoing feud has made markets, particularly cryptocurrency, more anxious and volatile.
Last week, Powell issued a supportive comment on crypto, stating U.S. banks can cooperate with crypto firms if they adhere to proper rules and safeguards. But if Powell were to resign or be let go, it would create huge issues for stablecoins USDT and USDC, which are collateralized by U.S. Treasury bonds.
At the same time, Federal Housing Director Bill Pulte recently stated that he thinks Jerome Powell “will be resigning soon, but today is not the day,” fueling speculation about the future of Powell. Additionally, Senator Cynthia Lummis added to the growing debate around Federal Reserve leadership by stating, “It’s time for new leadership at the Fed. We need a Chair who has the trust of ALL Americans.”
If Jerome Powell were to resign, it could create major uncertainty in the financial markets, especially in crypto. Investors might expect the next Fed chair to cut interest rates, which could boost Bitcoin and other cryptocurrencies in the short term.
Also Read: How Fed Chair Powell Speech Could Impact Bitcoin, ETH, XRP Prices?
