Crypto Markets Defy Gravity as Fed Struggles With Inflation

Digital assets surge while traditional finance grapples with monetary policy whiplash.

Bitcoin and altcoins rally as Powell’s Fed faces its toughest inflation fight since the 1980s—proving once again that decentralized networks move faster than bureaucratic committees.

Bonus jab: Meanwhile, Wall Street analysts still can’t decide if crypto is ’digital gold’ or a ’speculative asset’—maybe because their bonuses depend on the answer.

Fed and Cryptocurrencies

In statements made at the time of writing, Logan confirmed previous assessments expressed here. The Fed is more concerned about risks greater than inflation. Despite favorable conditions for interest rate cuts, fears of a potential crisis due to tariffs compel the Fed to wait in order to make future actions more effective.

During his ongoing speech when this article was prepared, Logan stated:

“Despite uncertainty, the overall economy remained resilient. The labor market is stable. Inflation is still slightly above the target. If tariff-related inflation expectations change, it WOULD be a significant development. Monetary policy is well-positioned to wait and be patient. We are in a strong position to act if risks materialize.

The main risk is that short-term inflation expectations become established.”

A small detail here is that “short-term inflation concerns” are weakening. Since the Geneva agreement, both 1-year and 5-year expectations have been declining, while the Consumer Confidence Index in the U.S. significantly exceeded expectations. Therefore, a lasting agreement with China is in the U.S.’s interest and necessary for TRUMP to secure rate cuts as the 2026 midterm elections approach.

Would Trump be happy to enter midterm elections with high rates and a dire economy? Absolutely not, thus the prospect for cryptocurrencies appears as a “more upward trend in the medium term.”

White House Economic Announcements

The WHITE House recently issued a new announcement addressing the current economic situation, highlighting statements from key figures in the administration. The focus of the announcement is Treasury Secretary Bessent’s statement, “Inflation is dropping, and there are no increases; for the first time in four years, we witnessed a decrease,” which suggests the time for rate cuts has come.

Commerce Secretary Howard Lutnick also made a statement:

“A trade deficit of $1.2 trillion and all its underlying consequences constitute a national emergency. It is hollowing out our manufacturing base… Rest assured, tariffs will not be lifted… Congress has granted this authority to President Trump, and he will utilize it.”

Furthermore, today the trade secretary mentioned that we will witness many trade agreements as July 9 approaches.