Bitcoin’s Wild Swings & the Fed’s Next Move: Buckle Up

Bitcoin just pulled another gut-wrenching 20% drop-and-rally—because why should traditional finance have all the volatility fun?

Meanwhile, the Fed keeps playing monetary whack-a-mole with inflation, leaving crypto traders to parse every vague ’data-dependent’ comment like it’s the Da Vinci Code. Spoiler: Powell’s poker face remains undefeated.

Pro tip: When the ’risk-free’ rate dances with recession signals, maybe don’t bet the farm on leverage—unless you enjoy donating to the crypto casino.

$103,390 as it hit a new local peak during the daily closing. This positive momentum, however, faced challenges from insurmountable resistances compounded by the U.S.’s chip restrictions on China and China’s retaliatory measures. The situation worsened when the U.S. credit rating was downgraded on Friday, a first in many years. But what insights are provided by the Federal Reserve members?

ContentsStatements from Fed MembersPerspectives from Jefferson and Williams

Statements from Fed Members

As the article was being prepared, TRUMP and Putin were about to begin a phone conversation, and within the last hour, significant statements were made by Fed members. Fed member Bostic was among those who spoke, highlighting critical points.

Bostic remarked that Moody’s downgrade will affect the economy and financial markets. The downgrade is expected to impact capital costs, which could reverberate through the economy. It remains to be seen how this will influence U.S. borrowing demand. The Fed must ascertain how the downgrade will affect an already volatile outlook.

We must wait 3-6 months to see how uncertainty dissipates. Prolonged tariff transitions may influence consumer behavior. This year, I am more inclined towards a rate cut. Treasury markets are still functioning exceptionally well.

As the cost of everything increases, investments will be impacted. I am deeply concerned regarding our mandate on the inflation side. I do not foresee massive layoffs in the NEAR future. The tariffs imposed on China remain economically significant.

Some employment data reflecting maximum capacity further distances the possibility of a rate cut solely due to inflation concerns at the Fed. This is troubling because, even as the PCE forecast has fallen to 2.2, maintaining tight rates is adversely affecting risk markets.

Perspectives from Jefferson and Williams

As announced in the weekly schedule on Sunday, other speaking members included Jefferson and Williams. Williams described the first-quarter growth data as unusual, highlighting uncertainties and emphasizing consumer sentiment’s strength.

“First-quarter growth was unusual due to trade issues. Inflation is decreasing slowly and gradually. The key concept for the economy is uncertainty. Monetary policy is well-positioned, with trade being a distinct point of uncertainty.

Some leading indicators are signaling concern. Many firms and households are in a wait-and-see mode. Inflation is decreasing slowly and gradually. The Fed has a long way to go in reducing its balance sheet. Global investors still view the U.S. as a favorable investment destination.”

Jefferson stated, “It is crucial for central banks to be prepared to provide liquidity,” signaling their readiness to act swiftly when necessary even in a tight-rate environment.

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