The Wall Street Journal reported on July 20 that U.S. Treasury Secretary Scott Bessent had advised President Trump not to fire Federal Reserve Chairman Jerome Powell before his term expires next year, as doing so would cause major shocks to financial markets and the global economy. Trump then refuted the report on Truth Social, emphasizing that "no one is qualified to teach him what is good for the United States and the market."
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ToggleThe Wall Street Journal says Bessant advised Trump not to fire Powell
The Wall Street Journal pointed out that Bessant recently reminded Trump not to replace Powell before his term expires next year, otherwise it would cause market panic and plunge the Fed into unprecedented legal and political disputes. Bessant also mentioned that the Fed has the opportunity to cut interest rates this year and there is no need to replace Powell at this time.
Trump previously said he was "very unhappy" with Powell because he believed the Fed should have cut interest rates significantly earlier to help the economy.
Trump quickly denied it on Truth Social and said: I don’t need to be taught how to do things
After the news broke, Trump immediately responded on his own social media platform Truth Social , criticizing the Wall Street Journal for "continuing to report false information as usual." He also pointed out:
"I know better than anyone what is good for the market and what is good for America. If it weren't for me, the market wouldn't have hit a record high right now, but would have collapsed long ago. So the Wall Street Journal better get your information straight. People don't teach me, I teach them."
Criticism of Powell intensifies within the White House
During this period, the Trump administration's top brass has been increasingly critical of Powell, with the focus shifting to the Fed's $2.5 billion headquarters renovation project, questioning the budget's out-of-control. Russell Vought, director of the White House Office of Management and Budget, even directly stated that Powell had "seriously failed to do his job," and used the renovation project as an example to demand an explanation from the Fed.
Powell also responded to Watt's question, saying :
"The Federal Reserve takes transparency and accountability to the public very seriously."
Epstein scandal leads to fight with media mogul Murdoch
Recently, Trump has been clashing with the media not only over the Wall Street Journal. A few days ago, Trump filed a lawsuit against media tycoon Rupert Murdoch, the boss of the Wall Street Journal, the New York Post and the FOX News Channel, on the grounds that the Wall Street Journal revealed that Trump had sent a letter "with a bit of dirty jokes" to the late billionaire Jeffrey Epstein wishing him a happy 50th birthday.
In response, Trump directly demanded a whopping $1 billion in compensation, including from Murdoch himself, his company News Corp, and the two reporters who wrote the report.
The Treasury Department and the White House have not yet responded, and replacing Powell may become a legal battle
However, firing a Fed chairman has never happened in U.S. history. If Trump really does it, it may trigger a legal battle and even appeal to the Supreme Court. The Treasury Department and the White House have not yet responded to this incident. The Wall Street Journal also maintained its original statement and did not withdraw the article.
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Cryptocurrency investment carries a high degree of risk. Its price may fluctuate drastically and you may lose all your capital. Please assess the risk carefully.
With the support of the Trump administration, Musk briefly became a symbolic figure in Washington, and the market value of his Tesla and SpaceX soared. However, from the breakup with Trump to the various controversies over Robotaxi and Grok AI, he has been on the road to self-destruction step by step. When the president becomes an enemy and investors begin to waver, people can't help but worry, is Musk's technology empire collapsing?
(The following content is from Bloomberg , ABMedia of Elon Musk)
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ToggleFrom Trump's favorite to political outcast: Musk's political career took a sharp turn for the worse
On May 30, when Musk appeared at the White House wearing a DOGE cap, the bruises on his face unexpectedly became the focus. He explained that he was beaten by his 5-year-old son. This may be just a farce, but it also became the starting point of his disorderly entry into politics.
As the core of power and best spokesperson for Trump's second term, Musk served as the "Minister of the Department of Government Efficiency (DOGE)". He mocked civil servants, cut funding for food banks, and even boasted that he would "send the entire federal agency into the wood chipper." Even though this caused a lot of public resentment, people from all walks of life still chose to cater to Musk in order to please Trump, which indirectly caused the market value of SpaceX and xAI to rise in the early days of his political career.
However, the deep connection between the two people and their interests soon caused problems. Musk's excessive edge caused his political support to drop by 20% in just one year, not only triggering a boycott against Musk and Tesla in the United States. Since its post-election high, Tesla's stock price has almost halved in three months.
Musk and Trump part ways: Difference in ideas was the fuse
If Musk had maintained a close relationship with Trump, the above situation might not have been fatal. After all, Trump not only urged the public to buy Tesla, but also let the government promote regulations in his favor.
However, a few days later, Musk went on a rampage on social media X, claiming that Trump could not have been elected president without him, and even accused Trump of being an accomplice in the Jeffrey Epstein sex scandal. Trump fought back , threatening to cancel all contracts with Tesla and SpaceX.
The dispute between the two cooled over time. Although Musk deleted the post related to Epstein and apologized, he later criticized Trump's "Big, Beautiful Act" because of the tax cuts that cut subsidies to Tesla. Trump said coldly about this matter:
Do you know what DOGE is? DOGE is a monster that may turn around and swallow Musk.
Trump holds all the chips. How can Musk get out of this?
What is worrying is that Trump's influence and threat to Musk is not as small as imagined. The Bloomberg Billionaires Index shows that Musk's assets are about 360 billion US dollars, but in fact his assets are highly dependent on the performance of his companies (especially Tesla's stock price), his relationship with the US government, and his personal and corporate fundraising capabilities.
Now, these three pillars are shaky as Trump and Musk have become increasingly hostile to each other, and even investors are beginning to express concerns about Musk's every move. Bloomberg commented:
Musk's company finances are intertwined with each other and are highly tied to his every move, so it is difficult for him to remain unscathed when problems arise. If Trump really takes ruthless action, he still has many tools at his disposal to attack Musk's career, and he may also encounter the "invisible hand of revenge."
Musk's career: Is his tech empire in danger?
Robotaxi self-driving promises continue to be broken, is Tesla's market value overestimated or does it have explosive potential?
Musk has always been pushing dates and making promises, from claiming that his cars would be fully self-driving in 2015 to now still pushing back the target date. In recent years, there have been a number of accidental and self-collision accidents, which have caused public concern. Even so, investors including ARK Invest founder Cathie Wood still believe in him. As for Tesla:
Tesla's market value is about 20 times that of General Motors (GM), but GM's annual vehicle sales are three times that of Tesla. There are only two possibilities for such a gap: either Tesla is overvalued, or it is about to usher in explosive growth.
However, the fact is that Tesla's vehicle delivery volume has declined for two consecutive quarters, Cybertruck has only sold 1/10 of the expected sales, the affordable car project has been quietly delayed, and there are reports of system chaos and high-level departures in the management. Trump's new tax reform bill has also canceled the $7,500 electric vehicle tax credit and carbon credit sales that Tesla relies on. JPMorgan Chase predicts that the company's annual profit this year will be halved.
Starship crash: Political interference in SpaceX shakes its dominance in space
SpaceX has always been Musk's most solid company, almost monopolizing the mission of launching satellites, cargo and personnel transportation in the United States, but it is now in turmoil.
The company had previously refused the Ukrainian military's request to use the Starlink network to assist in the counterattack against Russia during the Ukrainian-Russian war, which aroused doubts about its position. Later, due to Musk's criticism of the "Big, Beautiful Act", Trump, on the one hand, contacted SpaceX's competitor EchoStar, and on the other hand, turned to injecting $4.1 billion into Boeing's SLS rocket in the bill. These actions were obviously a counterattack against Musk.
As the company that Musk trusts the most, SpaceX's space business landscape is now unbalanced due to Musk's personality and political manipulation.
( Ark analyzes SpaceX's grand ambitions: its valuation will increase sevenfold by 2030 )
xAI is losing money and facing controversy, relying on SpaceX and Tesla for cash flow
Musk's newly established xAI is his latest gamble and the biggest money-burning machine. The latest model, Grok 4, was called the world's most powerful AI by him, but it was immediately found to contain anti-Semitic, white supremacist and genocidal remarks after its launch, and even frequently quoted Nazi memes and conspiracy theories, which triggered criticism from the outside world.
What worries investors is that xAI is expected to lose up to $13 billion this year and have revenue of only $500 million, but it plans to raise more than $20 billion, including funding from SpaceX. Musk even said that he would ask the Tesla board of directors to also allocate funds to support xAI.
When the hero becomes the source of chaos: Is Musk’s technology empire crumbling?
Musk has always been a master at surviving desperate situations, with both Tesla and SpaceX on the verge of bankruptcy. However, this time it is not just a single problem, from losing the White House backer, founding a new party, the American Party, to being unable to manage his various companies, everything is time-consuming, costly and mentally exhausting.
At the same time, as a promoter of global technological evolution, Musk's business empire is not only built on technology and innovation, but also on his personal charm and the trust of investors. Today, these foundations are gradually collapsing due to his own political fanaticism, ideology and speech storms. As Bloomberg commented:
Although the president has the ability and means to harm Musk's business empire, if we have to say who is the biggest variable in the empire, Trump probably has to rank behind Musk himself.
Now that he has lost Trump's protection, he has become the biggest risk in the business landscape. The empire has not fallen, but cracks have already appeared. And the first brick was knocked down by Musk himself.
Risk Warning
Cryptocurrency investment carries a high degree of risk. Its price may fluctuate drastically and you may lose all your capital. Please assess the risk carefully.
