The main event of yesterday was the decision on the rate and Jerome Powell's press conference. The rate remains unchanged (to my regret), but Powell was on point.
He was once again talking about inflation, tariffs, and the most interesting part — made it clear to everyone that Trump is to blame for inflation with his stupid stories. It turns out that Doni still couldn't bend Powell to his will and once again showed the whole world that the King is naked and his maximum is to fantasize on Twitter.
If this is understood domestically, then external opponents understand it too, and therefore — there is no need to rush into concessions now.
Unlike the USA, others have all the levers of influence:
▪️Yesterday China lowered rates;
▪️Today it's the Bank of England's turn;
▪️In the Eurozone, calls to ease monetary policy to stop the strengthening euro, which is harmful, are becoming louder.
Everyone is making deals, finding new markets, solving long-term problems, while the USA has already lost more than it gained. And this is in just a few months of governance.
To somehow save face after the public humiliation, Trump stated that he is ready to reconsider the restrictions on the export of AI chips imposed under Biden.
Rumors have circulated (most likely, Trump himself is their initiator) that a trade agreement with Great Britain regarding tariffs is expected today.
Trump also announced the future largest tax cut for middle and working-class Americans.
Let's return once again to the Fed.
Now the agency will respond to inflation and the labor market and see what deviates more strongly. But the priority is the labor market.
And this is correct: the current data on inflation may be distorted due to the frenzied demand for goods before the introduction of Trump's tariffs — businesses were trying to stock up, and people were buying more goods before prices rose.
But I want to once again draw attention to the fact that Trump is deliberately sabotaging Powell and is trying in every way to show his autonomy. The rate cut by 50 basis points before the 24 elections was 100% politically motivated to help the Democrats.
Today is also an important day!
The U.S. Senate will vote on the GENIUS Act — the first national regulation regarding stablecoins.
If the vote fails, regulation of the crypto market may be postponed for months again. This will impact the current momentum and may slow down the process of institutional adoption.
A little more positivity:
U.S. banks can now act as executors of crypto transactions at client requests, can engage in outsourced crypto custodial services, and conduct tax reporting on crypto.
And this is an injection of new money into the market.
Now anyone can walk into a bank and say: 'Buy me Bitcoin' — and the bank will gladly do it, as it is also fighting for a piece of the pie in the form of liquidity in the crypto market.
Author Business in Torn Pants.