This could become the most significant showdown in the financial sector in 2025. After leaving office, Trump suddenly took action, publicly threatening to sue Federal Reserve Chair Jerome Powell and vowing to push interest rates directly down to 1%. The confrontation between top political figures and financial leaders is heating up, and the ripple effects of this storm are now spreading into the crypto world.

The situation is fermenting. Trump's team continues to pressure the Fed, accusing it of "gross dereliction of duty," and attempting to use political pressure to accelerate more aggressive rate cuts. Their clear goal is to bring the interest rate down to a super-low 1%. Currently, rates are still stuck in the 3.5%-3.75% range, and although there have been three cuts this year, the latest Federal Reserve meeting minutes cast cold water on expectations. Internal opinions are deeply divided, with only one rate cut possibly next year, and some members warning that inflation may not return to the 2% official target until 2028.

This high-level game of chess has a double-edged impact on the crypto market:

If Trump’s side gains the upper hand, interest rates could plummet sharply. Massive low-cost funds might flood into the digital asset market, sparking an epic bull run. Conversely, if his pressure triggers market panic, the Fed’s independence could be seriously shaken, market confidence might collapse publicly, and the crypto space could face a bloodbath at any moment.

A look at history makes this clear: the last time expectations of rate cuts fluctuated wildly, Bitcoin plummeted over 30% within a month, and hundreds of thousands of traders’ positions were liquidated. Today, the tension is even greater. Powell’s term doesn’t end until 2026, but Trump has already issued a harsh warning: "Those who are unwilling to cut rates according to my plan are not qualified to continue as Chair."

More concerning is the Fed’s behind-the-scenes moves. Reports indicate that the Fed is quietly planning to purchase $220 billion worth of short-term government bonds over the next 12 months, averaging about $40 billion per month. This effectively opens an invisible channel for liquidity injection.

From the language in the meeting minutes, signals are becoming more subtle. Most members have shifted toward a dovish stance, supporting rate cuts, waiting for inflation data to give them a reasonable reason to step down. The market is betting that by March next year, the probability of rate cuts will rise rapidly. This isn’t an active loosening of policy but a "forced move" driven by economic slowdown pressures.

For investors holding ETH, ZEC, and other cryptocurrencies, the upcoming policy pace will directly influence market trends. The key is to watch how far Trump’s pressure can go and whether the Fed will ultimately concede. The current interest rate deadlock may not last long, but the volatility during this process is likely to test everyone’s psychological bottom.