It was an extremely important evening for cryptocurrencies and BTC tested above $94 thousand. Trump made AI statements while Powell was speaking, and Powell did not make as hawkish statements as feared. We will quickly discuss what today means and what awaits us.
Fed and Cryptocurrencies
Interest rate cuts came and 40 billion dollars worth of treasury bills were announced. In this context of balance sheet balancing, we are not talking about full monetary expansion, and we also talked about it a few days ago. Powell Although it was following this strategy for a smooth transition, the fact that we saw fewer warnings about inflation concerns was one of the most important details of today.
“The Committee will consider that reserve balances have decreased to sufficient levels and will begin purchasing shorter-term Treasury securities as necessary to maintain an adequate reserve supply.” – Fed
One way or another, the Fed is moving into the monetary expansion phase. So we can say that we are moving towards QE with a delay. Powell could also have mentioned concerns about inflation today, but he talked about the potential for data revisions to suggest employment may be weaker than thought. Crypto will be volatile. Unless we see closes above $94,000, volatility drops approaching $88,000 would not be surprising because we have a chart that is largely triggered by liquidations on the futures side.
Although interest rate forecasts of 3.9% for the end of 2026 imply that there may be an interest rate increase next year, Powell said, “Right now, an interest rate increase is not anyone’s baseline scenario. I have not heard of such a thing.”
Nick Timiraos drew attention to the following details;
- Powellannounced that the recalibration phase was completed; They are now in a good position to wait. (In December, he also said that they would decide from meeting to meeting and that the interest rate cut was not the basic scenario, this time he was a little more serious.)
- He attributed the division within the committee to unusual tension in the dual mandate and found both sides of the debate right.
- He stated surprisingly directly that employment growth could be negative due to measurement difficulties. “The gradual cooling in the labor market continued at a slightly slower pace than expected,” reducing concerns about services inflation.
- Even if interest rates are near neutral, a rate hike is no one’s baseline scenario. Opinions range from “let’s stop here” to “download more.”
The reason for today’s interest rate cut was clearly their recognition that real employment figures were lower.
“We can say that the labor market continues to gradually cool, although a little slower than we thought.”
The next meeting is approximately 49 days away and the data until that day will increase volatility. While a further contraction in employment will improve expectations for the next meetings, an increase in inflation above 0.3% will be concerning. Market expectation for the first discount points to April, and a single discount is expected until July. The scenario priced in the market for 2026 is only 2 discounts, but it is positive that Trump will announce the new Fed chairman by the end of the year and improve the expectations for the last 5 meetings of the year. Only the January, March and April meetings remain where Powell will serve as chairman.
BTC At the time of writing, it is approaching the $92 thousand base and erasing the gains in the question and answer section.
Trump’s Statements
We were also following Trump’s statements at the roundtable meeting with the CEOs of the same but artificial intelligence-focused companies. That was one reason for the impending surge as Powell spoke. trump He said he talked to Senators about regulation and artificial intelligence He hinted that it would relieve the industry. He just announced that he will meet with WARSH today for the Fed President elections.
Additionally, the highlights of his statements are as follows:
“We will approve the factory construction in a few weeks. I don’t see why we can’t get 20%, 25% GDP growth. We can do that. The market should continue to rise with great results. We should be able to achieve more than 3% or 4% of GDP. The rate cut was a small number that could have been more. The Fed’s interest rate reduction It could have been doubled.”
The agenda is busy and new data will have a big impact on the charts. CryptoAppsy news section can make your job easier in this regard.
