Polymarket Bets Signal Powell Safe in 2025, While Trump’s Challenge to Lisa Cook Tests Fed’s Independence

Prediction markets show investors largely unconvinced that Donald Trump can reshape the Federal Reserve this year, despite the U.S. President’s unprecedented move to dismiss a sitting governor.

On Polymarket, bettors assign just a 10% probability that Chair Jerome Powell will be forced out in 2025, reflecting expectations that his term, which runs through May 2026, remains secure.

Trump’s effort to remove Governor Lisa Cook has drawn more attention. He alleged mortgage fraud in a letter posted to Truth Social, making Cook the first sitting Fed governor targeted for dismissal. Cook has refused to step aside, arguing that “for cause” removals apply only to misconduct in office, not financial disputes predating her tenure. Polymarket participants currently price a 27% chance of her ouster by year-end — notable but still implying she is more likely than not to stay.

While Fed independence is often framed as sacrosanct, history shows presidents have intervened before. Harry Truman pushed out Thomas McCabe in 1951 to secure wartime financing; Lyndon Johnson pressured William McChesney Martin during the Vietnam War; and Richard Nixon leaned on Arthur Burns ahead of the 1972 election, in moves economists later linked to runaway inflation. A 2013 Cato Institute study even concluded that Fed autonomy is “more myth than reality,” with both parties interfering when politically convenient.

Markets would likely react strongly to Powell’s removal. A White House-aligned Fed could cut rates more quickly, weaken the dollar, and boost risk assets, potentially supporting bitcoin (BTC $109,769.34). Beyond short-term liquidity effects, such a move would also reinforce crypto’s narrative that fiat systems are politically captured while bitcoin stands apart as “hard money.”

Still, traders appear unconvinced Trump’s gambit will succeed. Bitcoin barely budged on the Cook headlines, rising just 0.3% before retreating, and remains down 2.6% on the day. The CoinDesk 20 index of major digital assets slipped 5.3% to below 4,000 by mid-day in Hong Kong.