Mike Novogratz has urged followers to buy Bitcoin amid increasing pressure that is being exerted on Jerome Powell.
Powell is facing hostile attacks due to his reluctance to cut interest rates, with some Republicans urging him to resign.
FHFA director Bill Pulte is now routinely targeting Powell in order to push for his termination. His most recent social media post is now accusing Powell of lying during his congressional testimony.
Novogratz believes that these are “Banana Republic moves,” defending Powell.
Critics argue that cutting interest rates would help to boost the U.S. economy since Powell’s current stance causes higher borrowing costs.
At the same time, Powell and the Fed are not willing to rush to cut interest rates since persistent inflation remains well above the central bank’s long-touted 2% target. Premature rate cuts could potentially exacerbate the inflation problem.
Strong job numbers also give more credence to Powell’s reluctance to reduce the benchmark interest rate.
Amid this growing pressure, there are some concerns that the independence of the Fed could end up being undermined, with markets previously rejecting the idea of firing Powell.
The central bank head has stressed that interest rate decisions have to be based on data instead of political biases.
Bitcoin proponents such as Novogratz believe that undermining the credibility of the most powerful central bank strengthens the case for the leading cryptocurrency.
Politicizing the Fed could lead to aggressive rate cuts, which will further weaken the dollar.
As reported by U.Today, Novogratz previously opined that the passage of the sweeping tax and spending bill was also bullish for Bitcoin, given that billions would be added to the U.S. deficit.