Bitcoin Dips as President Trump Blasts Fed’s Call for More Stimulus

Key Takeaways

  • The Chairman of the Federal Reserve Jerome Powell called for continued aggressive fiscal policies and more monetary stimulus.
  • The Managing Director of the IMF holds similar views on providing more stimulus.
  • But, President Donald Trump has tweeted against the Fed’s policies, causing a dump in the stock market and Bitcoin prices.

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President Trump shot down Chairman Powell’s calls to add more stimulus to the economy. Markets, including Bitcoin, have since dumped following the clash.

Economic Stimulus: Choosing the Lesser of Two Evils 

Powell told the National Association for Business Economics (NABE) on Tuesday that the risk of “overdoing it seems smaller” than pausing the stimulus. 

The Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva, also gave an online speech to the London School of Economics, which echoes Powell’s views. She said: 

“We are very clear in the message we are communicating to not withdraw support prematurely. If we do so, then we risk massive bankruptcies and massive unemployment.” 

Although the American GDP is likely to rebound after its 31% plunge during the second quarter, Powell said recovery still has “a long way to go.” Indeed, both organization heads believe that holding off the stimulus now can lead to worse outcomes than the last quarter. 

This is because any economic progress made this year has all been thanks to previous stimulus efforts. The national U.S. debt has now surpassed $27 trillion, and the Federal Reserve has increased its asset by $3 trillion since March 2020, a whopping 75% increase.

Trump Goes Against the Federal Reserve

While the Fed Chairman’s initial announcement received muted reactions from gold and Bitcoin traders, President Trump’s follow-up tweet later in the afternoon caused a drop in the stock market. 

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Trump plans to put the talks of stimulus on hold for “until after the elections.” Trump added: 

“I have…

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