On August 12, 2025, President Donald Trump announced he is considering a lawsuit against Federal Reserve Chair Jerome Powell over $3 billion in Federal Reserve renovation costs, as reported by TheNewsCrypto. Labeling Powell’s management as “grossly incompetent,” Trump criticized the project’s ballooning budget from an estimated $50 million, per his Truth Social post. This follows a pattern of tension, with Trump pushing for immediate interest rate cuts after July’s CPI data showed inflation at 2.7%, below the expected 2.8%, per Cointelegraph. The crypto market responded, with Bitcoin surging to $119,000 and Ethereum reaching $4,400, reflecting a $113 billion market cap increase, per TheNewsCrypto. X posts from @ETNOWlive amplify Trump’s narrative, highlighting his frustration with Powell’s delays.
According to candidate Stephen Miran on CNBC, the CPI data shows that yearly inflation has been stable at 1.9% since Trump’s inauguration, supporting claims that Trump’s tariffs aren’t causing price increases, according to Forbes. The CME Fed Watch tool indicates an 82.4% chance of a 25 basis point rate cut in September, boosting crypto sentiment. Technical analysis from CoinGlass shows Bitcoin’s RSI at 76, signaling strong momentum but nearing overbought territory. Ethereum’s trading above its 50-day EMA ($4,200) reinforces bullish trends, per TradingView. However, Trump’s lawsuit threat, tied to a prior DOJ perjury claim, introduces uncertainty, as legal action against a Fed Chair is unprecedented, per Bloomberg. This could impact bond yields, with the 10-year Treasury hitting session highs post-CPI, per Coinedition.
Trump’s push for lower rates and his lawsuit rhetoric have catalyzed a crypto market lift, with Bitcoin and Ethereum gaining 5.2% and 6.8% respectively, per CoinDesk. The $113 billion market cap boost reflects expectations of looser monetary policy, historically favorable for risk assets, as noted by Cryptoview.io. However, Powell’s cautious stance, citing tariff-related uncertainties, could delay cuts, per CNBC. Regulatory risks also loom, with the SEC and DOJ potentially scrutinizing Trump’s legal moves under frameworks like 18 U.S.C. § 981, per Coinlaw.io. Investors should monitor Bitcoin support at $112,000 and Ethereum at $4,000, as a pullback could follow overbought conditions, per Techopedia. X posts from @FOMCAlerts suggest market volatility if the lawsuit proceeds.
Looking ahead, a September rate cut could push Bitcoin toward $125,000, as predicted by Tom Lee, per Techopedia, with Ethereum potentially hitting $5,000, per Coinpedia. Trump’s nomination of Stephen Miran signals intent to influence Fed policy, potentially stabilizing crypto markets, per TheNewsCrypto. However, the lawsuit threat risks market disruptions, as seen in past Fed-related volatility, per Forbes. Investors should track CPI updates via BLS.gov and follow X accounts like @TheBlock__ for real-time insights. Dollar-cost averaging into Bitcoin and Ethereum and setting stop-losses below key supports can mitigate risks. Staying informed on DOJ developments and Federal Reserve announcements will be crucial for navigating this dynamic crypto landscape through late 2025.
