Fed in Fiscal Crosshairs as Economic Data Goes Rogue

Jerome Powell’s playbook looks about as useful as a 1999 dot-com business plan this week. The Fed’s ’data-dependent’ mantra rings hollow when jobs numbers and inflation metrics can’t even agree on what decade we’re in.

Wall Street’s algo-traders are already pricing in seven possible outcomes—including one where the Fed accidentally tightens into a recession while the 10-year yield moonwalks past 5%. Classic central banking: where the ’transitory’ mistakes of 2021 become the full-employment crises of 2025.

Meanwhile, crypto markets keep doing their own thing—because when traditional finance loses the plot, digital assets write their own script. (Bonus jab: At least Bitcoin’s volatility comes with honesty.)

Cryptocurrencies by 2025

Cryptocurrencies have significantly benefited from institutional demand, although there are challenges they bring. They are increasingly sensitive to macroeconomic developments, particularly global tariffs that have unsettled markets. Thus, factors like recession concerns and inflation forecasts are shaping the future of cryptocurrencies.

Jamie Dimon recently addressed these issues. The announcement of reducing tariffs with China and a 90-day negotiation period marked a major step forward, attributed to the recent surge in cryptocurrency values. Nonetheless, Dimon stresses that the risk of a recession in the U.S. has not entirely subsided, despite this progress.

“If we face a recession, its severity and duration are uncertain. I hope we can avoid it, but I wouldn’t completely rule it out,” Dimon stated.

JPMorgan’s economists currently assess the likelihood of a recession as less than 50%. Michael Feroli, JPMorgan’s Chief Economist, informed clients this week that the “recession outlook is still elevated but below 50% at this stage.” For cryptocurrencies, this suggests that growth might be limited by 2025.

Will Cryptocurrencies Continue to Rise?

Forecasts do not always come to fruition. In past years, financial giants issued recession warnings accompanied by layoffs, yet the downturn did not occur. Now, as Microsoft cuts 3% of its workforce, giants like JPMorgan highlight recession risks.

Dimon also predicted a recession before the China deal was struck. The agreement occurred, and discussions for further improvements continue, showing Dimon doesn’t have a crystal ball seeing the future.

While recession concerns have made investors cautious, quick resolutions with China suggest more deals may follow. As these unfold, and the Fed begins reducing interest rates, no barriers WOULD remain against a cryptocurrency surge by 2025.

However, this won’t happen overnight. When BlackRock filed for a BTC ETF, Bitcoin’s price was below $30,000, highlighting expectations for a strong rise. Impatient anticipation came with a cost, and presently, despite adversities, Bitcoin$102,546 stands at $102,000. The blue dot in the chart marks the ETF launch week.