The week has begun on an fascinating be aware, with the U.S. greenback crashing to three-year lows alongside losses on Wall Road, but bitcoin, which often follows the sentiment on Wall Road, stands tall.
This might simply be the start.
The shift away from the USD and towards seizure and censorship-resistant property like BTC and stablecoins might speed up if President Donald Trump follows by way of along with his reported plans to fireplace Federal Reserve Chairman Jerome Powell, which have pushed the DXY and U.S. inventory markets decrease immediately.
That is the lesson from Turkey, which has seen its forex, the lira (TRY), collapse through the years primarily resulting from President Recep Tayyip Erdogan’s repeated interference within the central financial institution’s operations. The sliding lira has triggered a capital flight into BTC and stablecoins since no less than 2020-21.
Trump’s points with the Fed
Trump has feuded publicly with the Federal Reserve and its chairman, Jerome Powell, for years, criticizing Powell for being too late on price cuts even throughout his first time period when rates of interest had been approach decrease than immediately.
Nonetheless, Trump’s criticism has just lately reached a fever pitch with studies suggesting he’s searching for methods to do away with Powell, who just lately warned of stagflation even because the President reiterated requires decrease borrowing prices whereas suggesting there isn’t a inflation.
Powell’s affected person method follows a commerce war-led spike in survey-based measures of inflation expectations, which might at all times develop into self-fulfilling.
Nonetheless, on Monday, Trump went additional, calling Powell a “main loser” and warning that the financial system might decelerate until rates of interest are instantly lowered.
Lesson From Turkey
Erdogan started interfering within the central financial institution’s operations in 2019, and since then, the lira has collapsed sevenfold from 5.3 per greenback to 38 per greenback.
It began with Turkey’s inflation price reaching double digits in 2017. It remained elevated within the subsequent yr, which prompted the nation’s central financial institution to improve the one-week repo price from 17.5% to 24% in September 2018.
The transfer probably did not go properly with Erodgan, who issued the primary decree dismissing Central Financial institution of Turkey (CBT) governor Murat Cetinkaya in July 2019. From then on till the top of 2021, Erdogan issued a number of decrees dismissing and hiring a number of CBT officers. Amid all this, inflation remained elevated, and the lira continued to depreciate at an alarming price.
“We actually don’t consider in excessive rates of interest. We are going to pull down inflation and trade charges with low-rate coverage … Excessive charges make the wealthy richer, the poor poorer. We gained’t let that occur,” Erdogan mentioned in 2021.
As of 2025, Turkey faces an inflation price of almost 40%, in line with information supply TradingEconomics.
This episode serves as a cautionary story for Trump, highlighting that tampering with central financial institution independence — particularly within the face of looming inflation — can erode investor confidence and ship the home forex right into a tailspin.
This doesn’t essentially imply that the USD will crash precisely like lira however may even see important devaluation.
Maybe it might show much more destabilizing for international markets, contemplating the greenback is a worldwide reserve forex, and the U.S. Treasury market is the bedrock for worldwide finance.
If higher sense fails to prevail, U.S. buyers might really feel incentivized to maneuver away from U.S. property and into BTC and different different investments, simply as Turks did.
