A Power Struggle Behind the "Renovation Fee" Controversy

In August 2025, a news story caused a stir on Wall Street— a certain country's politician launched a legal attack against the Federal Reserve Chair, citing a $600 million overspend on the Fed headquarters renovation. On the surface, it appears to be an anti-corruption audit, but in reality, this move is more strategic: it’s a personnel maneuver for the Chair’s term ending in 2026.

This isn’t just an audit; it’s a calculated "encroachment" on the central bank’s authority. As a market observer, you can feel that familiar pressure—when political power begins to interfere with the central bank, the likely outcome is market volatility and a collapse in investor confidence.

The "Coup" Three-Step Strategy: Law, Public Opinion, and Personnel

Although suing the Chair faces legal hurdles like "sovereign immunity" and "political principles," what is the real goal? Public opinion warfare. By branding the central bank as "mismanaged," they aim to weaken the current Chair’s credibility in the market—this tactic is swift and ruthless.

Meanwhile, the White House quickly released a list of 8 potential successors. The characteristics of this list are clear—hawkish candidates, White House confidants, and individuals with execution capability. The core logic is straightforward: whoever is needed to implement low-interest-rate policies, push them forward.

The market’s most direct response was evident. Once a politician merely threatened to replace the Fed Chair, U.S. stocks, bonds, and the dollar all plummeted together. What does this tell us? The independence of the central bank is the cornerstone of market confidence. Once this cornerstone is lost, everything will shake.

A Reflection on History

Looking back to the 1970s, Federal Reserve Chairman Burns had to maintain low interest rates under political pressure. What was the result? Stagflation arrived—inflation spiraled out of control, and the economy stagnated. In the 1980s, Volcker’s independent decision-making and resolute rate hikes finally tamed inflation. The contrast between these two decades couldn’t be clearer—central bank independence is essential for solving problems; political interference leads to disaster.

What if this political intervention truly succeeds? What might we see after 2026? Excessive rate cuts → resurgence of inflation → forced market adjustments. Term premiums could be pushed higher, the fragility of U.S. Treasuries exposed, and liquidity risks increased.

Implications for Crypto Assets

When loose monetary policy dominates the market and liquidity is abundant, where does the capital flow? Risk assets. Bitcoin and other cryptocurrencies often benefit from policy easing. But conversely, if central bank independence is compromised, policies fail, and inflation rebounds, crypto assets will experience particularly volatile swings during market adjustments.

This is not just a political event; it’s a re-pricing of market expectations. Investors holding or considering increasing their Bitcoin holdings need to closely monitor the issue of central bank independence.