Trump’s Push to Reshape the Fed Could Erode the US Dollar’s Reserve Status and Trigger a Stagflation Cycle

COINOTAG News reports intensifying political pressure on the U.S. monetary framework as policymakers debate the Federal Reserve’s rate trajectory. Even with formal independence intact, the clash raises questions for the crypto market, where policy expectations drive liquidity, volatility, and the price discovery of digital assets such as Bitcoin and Ethereum.

Analysts caution that politicized rate decisions often track the electoral cycle, delivering short-term growth but risking renewed inflation, higher nominal rates, and slower growth. In such a scenario, the real value of USD funding could alter risk premia, influencing margin requirements and collateral dynamics across the crypto market and DeFi platforms.

Investors should monitor policy shifts for re-pricing of macro risk; maintain disciplined risk controls, diversify into assets with clear use cases, and assess balance sheets in projects tied to on-chain transparency. A policy path that challenges Fed independence may reprice downside and upside in digital assets, especially Bitcoin and Ethereum.