Fed Chairman Powell may face a criminal investigation: expectations for interest rate cuts rise, Bitcoin market may be affected.

Fed Chairman Powell is facing a criminal referral from Republican Congressman Luna, accusing him of perjury during congressional hearings regarding the renovation costs of the Fed building. This comes at a time when President Trump continues to pressure the Fed for significant interest rate cuts. Market expectations for a rate cut in September have risen to 56.1%, with a high probability of maintaining rates at 97.4% for the July meeting. The Fed's policy direction and the chairman's controversy are impacting the nerves of the Crypto Assets market.

Powell Faces Criminal Investigation Risk as Trump Pressures for Interest Rate Cuts

Fed Chairman Jerome Powell continues to face pressure as President Trump is strongly pushing for the Fed to cut interest rates. This time, an ally of the president in Congress, Republican Congressman Anna Paulina Luna, has referred Powell for criminal charges to the U.S. Department of Justice, which means Powell may now face a criminal investigation.

Details of the Perjury Allegations: Renovation Costs and Congressional Testimony in Focus

According to Fox News, U.S. Representative Luna is requesting the Department of Justice to bring criminal charges against the Fed Chairman. The congressman accuses Powell of perjury in two instances.

Luna stated in a letter to the Department of Justice that on June 25, Powell provided false sworn testimony during his testimony before the U.S. Senate Banking Committee regarding the renovation of the Fed's Ekels building. She added that the Fed chairman made several substantive false statements.

Regarding the second allegation, Luna pointed out that in a letter to the Director of the Office of Management and Budget (OMB), Russell Watt, Powell described the change in renovation costs from $1.9 billion to $2.5 billion as "minor." She emphasized that this is not the case, as documents reviewed by congressional investigators show that these changes are anything but minor.

The context of these allegations comes as Trump and his allies continue to pressure Powell to lower the interest rate. The President has specifically urged the Federal Open Market Committee (FOMC) to implement a 300 basis point reduction by the Fed. Given the current low inflation, Trump believes that a Fed rate cut should have already taken place.

The consequences of perjury allegations are severe, and Powell's job stability is in question

The nature of the perjury charge is serious, and Jerome Powell could face up to five years in prison and fines. It is currently unclear whether the criminal investigation is sufficient to constitute grounds for Trump to dismiss the Fed chairman—reportedly, the president had considered such a move.

However, Trump stated that he is unlikely to fire Powell, but hinted that the cases involving alleged fraud could lead to Powell resigning or being forced out. Due to Powell's hesitation on interest rate cuts, Trump has continued to criticize him.

Fed rate cut expectations soar, July meeting likely to remain unchanged

Meanwhile, it is worth noting that as Powell's future is uncertain, market expectations for a Fed interest rate cut have risen sharply. According to CoinGape, the market currently expects a 56.1% chance that the Fed will lower interest rates in September.

However, regardless of what happens from now until the FOMC meeting on July 30, the likelihood of the Fed lowering interest rates at the upcoming meeting is very low. This is mainly due to the June U.S. employment data showing that the labor market remains robust. The CME FedWatch tool indicates that there is a 97.4% probability that interest rates will remain unchanged after the July meeting.

Conclusion: Fed Chairman Powell has been unexpectedly referred for criminal charges, casting a shadow over the direction of U.S. monetary policy and increasing market uncertainty. Trump's continued pressure to cut interest rates intertwines with legal actions from Congressional Republicans, highlighting the escalating political pressure on the Fed. Market expectations for a rate cut by the Fed in September have significantly intensified, while the July meeting is virtually certain to maintain interest rates. This event not only relates to dollar policy and global financial stability but also the changes in liquidity expectations it triggers will profoundly impact the crypto assets market trends. Bitcoin and major coin investors need to closely monitor subsequent Fed interest rate decisions and developments surrounding Powell's situation.