Cutting interest rates is not 'opening the floodgates', but 'walking on a tightrope' - the Federal Reserve has to prevent the economy from falling into the abyss of unemployment while also keeping the inflation tiger at bay.
Federal Reserve official Bostic made a statement today: although the job market is somewhat lacking right now, he is still 'concerned' about inflation, so he does not want to support another interest rate cut in October for the time being. More harshly, he directly predicts that there will only be one interest rate cut in all of 2025, including the cut that just happened last week, which means that the remaining two Federal Reserve meetings this year will likely remain unchanged.
Why is he so 'conservative'? The core is just one sentence: inflation has not completely 'surrendered'. Bostic said: 'Long-term inflation exceeding the target keeps me awake at night, and we can't rush to cut interest rates now; we need to see the subsequent data first.' However, he also softened his stance - he voted in favor of the interest rate cut last week because the economic risks are now 'more balanced' than they were three months ago: three months ago, inflation was the number one enemy, but now employment and inflation are 'fifty-fifty', so cutting interest rates is a case of 'choosing the lesser of two evils.'
Bairan's sharp commentary
The Federal Reserve's current actions are essentially a "trade-off of time for space." If interest rates are cut too aggressively, inflation may rebound; if interest rates are not cut, the job market may collapse. The 'cautious faction' represented by Bostic is now in the ascendancy, indicating that the Federal Reserve's vigilance against inflation has not been lifted. For the cryptocurrency sector, this
means:
In the short term, don't expect 'flooding': Dollar liquidity will not suddenly surge, and the crypto market is unlikely to see a 'rate-cut bull';
Long-term attention to 'employment data': If the unemployment rate continues to soar, the Federal Reserve may be forced to shift, but the premise is that inflation must first 'soften';
Bitcoin's 'hedging card': When the Federal Reserve is 'in a dilemma', market volatility will rise, and Bitcoin may become a tool for hedging risks, but don't blindly chase highs.
The Federal Reserve's 'tightrope' game continues, how should the cryptocurrency sector layout in advance? Follow Bairan, who dissects macro signals in the most down-to-earth way every day, helping you seize the 'certain opportunities' in the crypto market!\u003cc-34/\u003e\u003cc-35/\u003e\u003cc-36/\u003e\u003ct-37/\u003e\u003ct-38/\u003e
