Trump is again pressuring Powell to cut interest rates, and he has threatened to sue him, citing the overspending on the Federal Reserve building renovation. In plain terms, he wants to ease the government's debt pressure by lowering interest rates, but Powell is holding firm, fearing a rebound in inflation.
This matter is quite critical for the crypto space. Historically, interest rate cuts tend to boost risk assets, and volatile assets like Bitcoin often benefit first. But it's different now; market expectations for a rate cut in September have dropped from 68% to 45%, with policy being uncertain, so short-term cryptocurrency prices will definitely fluctuate.
What's more troublesome is that while Trump is pressuring for a rate cut, he is also pushing for a stablecoin bill that aims to tie stablecoins to U.S. Treasury bonds, which clearly squeezes the space for Bitcoin.
However, in the long run, his antics undermining the independence of the Federal Reserve and questioning the dollar's credibility might lead to capital flowing into decentralized places like Bitcoin for safety.
In short, it's now about betting on policy direction; don’t blindly chase price increases or drops, but rather focus on the Federal Reserve's next move for a more reliable approach.
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