RateCutExpectations

Political pressure is mounting around the US Federal Reserve as expectations for rate cuts intensify. Fed Chair Jerome Powell will testify before Congress this week to provide an update on the central bank’s views on inflation and the economy. On Tuesday, June 24, 2025, at 10:00 a.m. EST, he will appear before the House Financial Services Committee in Room 2128 of the Rayburn House Office Building. On Wednesday, he will testify before the Senate Banking Committee. Several other Fed officials are also scheduled to speak throughout the week.
Powell faces growing criticism, especially from President Trump, who has repeatedly demanded aggressive rate cuts. Trump has called for a three percentage point reduction, accusing Powell of being behind the curve while other central banks, particularly in Europe, have already moved to ease policy. On Truth Social, Trump lashed out again on Tuesday morning, calling Powell “too late” and urging Congress to hold him accountable for refusing to lower rates, claiming lower rates could save the US $800 billion per year.
Meanwhile, political influence appears to be creeping into the Fed itself. Two key Fed officials, Governor Michelle Bowman and Governor Christopher Waller, recently suggested that rate cuts could begin as early as July if inflation data remains consistent. The next FOMC meeting is scheduled for July 29 and 30.
Speaking in Prague, Bowman stated that she could see a case for loosening policy next month, while Waller echoed similar views. Despite that, markets remain skeptical that July will be the starting point, with most pricing favoring September for the first rate cut.
Last week, the Fed kept rates unchanged, but policymakers forecast 50 basis points of total easing by December, likely through two quarter-point cuts. The Fed’s latest projections reflect lower growth expectations combined with stubbornly high inflation, raising concerns about stagflation. Trade tensions, tariffs, and unpredictable price pressures tied to Trump administration policies add further uncertainty.
The next key data point is Friday’s release of the May PCE inflation report, the Fed's preferred inflation measure, which will signal whether price pressures are easing toward the 2 percent target.
Powell’s testimony today at 10:00 a.m. EST and again on Wednesday could trigger market reactions, especially if Trump’s political allies aggressively challenge him. With the Fed divided over timing and the economy flashing mixed signals, the stakes for Powell and for monetary policy are higher than ever.

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On June 17, just one day before the FOMC decision, Bitcoin spot ETFs recorded a net outflow of $422.70 million. That alone is enough to rattle confidence. ARKB pulled $191 million, FBTC dropped $208 million, and others followed. The outflow wiped out the previous day’s strong inflow, flipping the weekly momentum entirely. This wasn’t slow rotation. It was a retreat.
It wasn’t just the ETF flows that told the story. Binance margin data showed that traders, too, were stepping away. The margin long-short ratio for BTC/USDC dropped from 40 to nearly 36 throughout the day, a clear signal that longs were closing out. The isolated margin borrow amount spiked briefly at times, but never sustained. Leverage wasn’t building. It was flickering and then disappearing. Even the overall growth of margin debt remained shallow and scattered, finishing the session near zero or below.
These weren’t signs of a market preparing to break out. They were signs of a market holding its breath. Institutional players stepped out first, pulling hundreds of millions from ETF exposure. Margin traders followed, scaling back positions, borrowing cautiously, and refusing to overcommit ahead of Powell’s remarks.
No one wanted to be long into uncertainty. Not when the Fed might double down on higher-for-longer. Not when liquidity is thin and every basis point of interest rate policy can flip the entire macro narrative.
If Bitcoin manages to rise from here, it won’t be because the market was positioned for strength. It will be in spite of that. Maybe on a short squeeze, maybe on dovish surprise. But from the data, it’s clear the dominant posture was caution. The money backed out. The leverage evaporated. The market voted with its feet.

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