📉 Fed Pivot Incoming—Will It Put the Brakes on Bitcoin’s Rally? 🪙⚠️

The Fed has kept rates between 4.25% and 4.50% since December. The second half of 2024 saw 1% rate reduction, prompting this approach.

Since 2025, Fed Chair Jerome Powell has advocated a "wait and see" approach, pausing cuts due to changing market conditions and the need to balance the central bank's dual mandate of managing inflation (price stability) and ensuring economic growth and sustainable employment.

With the Consumer Price Index (CPI) climbing 0.3% MoM in June after gaining 0.1% in May, US President Donald Trump's tariffs and trade policies have dominated Fed policy.

CPI rose 2.7% annually in June following 2.4% in May. All goods and services CPI, excluding volatile food and energy costs, climbed 2.9% YoY.

Consumer price index (CPI) tracks price changes over time. It measures inflation and affects Fed economic policy.

June's CPI figures will be significant for the July 30 FOMC meeting. Market players must also consider President Trump's August 1 tariffs, which might cause sticky inflation in the following months.

Meanwhile, President Trump's constant criticism of Fed Chair Powell raises questions about the central bank's independence. At a Tuesday briefing, the President called Powell a "numbskull" who has raised interest rates, Reuters reported.

"I believe he did poorly, but he'll be fired shortly. President Trump told Philippine President Ferdinand Marcos Jr. at the White House that he will be gone in eight months.

Powell is slated to serve until May 15, when his tenure ends. He refuses to quit. Powell might leave office early by mid-March if Trump gets his way.

Powell and other Fed officials think long-term inflation is steady. They stress the necessity to analyze the short-term effect of increasing tariffs on products and services pricing as corporations pass on costs to consumers. This might raise inflation due to pricing pressure.


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