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Exaggerated claims about China circulated during the preparation of this report, highlighting the need to manage expectations carefully. There are clear signals indicating a softening of relations with China; however, unsubstantiated news leaking about agreements can lead to price volatility and potential losses.
Fed Statements
BTC stands at $91,200, while some altcoins experienced increases of around 5%. The IMF revised its growth forecast for the U.S. downward today, and the U.S. Treasury Department mentioned a reduction in tensions with China. Fed member Kashkari made significant statements ahead of the upcoming Fed meeting, which is fast approaching.
Key highlights from his statements include:
- An independent monetary policy leads to better economic outcomes and is fundamental. (Trump’s pressure on Powell)
- My transition from dove to hawk is based on data analysis.
- Tariffs are somewhat inflationary and slow down growth.
- It is still too early to evaluate the path of interest rates.
- It is reasonable for tariffs to cause a one-time price increase, but the underlying high inflation risks not stabilizing inflation expectations. We cannot allow inflation expectations to remain unstable.
- So far, long-term inflation expectations have not moved much, and the Fed’s job is to ensure they do not.
- The rise in bond yields and the fall of the dollar indicate that global investors are reassessing where to invest.
- All of this can change rapidly with the resolution of trade uncertainties.
- We are witnessing the sharpest drop in safety since March 2020.
- We have not seen this level of concern since COVID.
- I have not yet seen evidence of widespread layoffs; however, I will closely monitor signs of whether the labor market has significantly softened.
Market expectations for the Fed’s interest rate decision, announced in 14 days and 23 hours, suggest a 90% probability of rates remaining steady. For the June meeting, a 65% chance of a rate cut is anticipated.
