This year, the Federal Reserve (Fed) has refrained from cutting rates and maintained a “wait and see” stance since Trump assumed office. With rising inflation, weakening manufacturing, and ongoing tariff uncertainties, the situation remains complex. While cryptocurrency investors hope for Fed rate cuts to rejuvenate risk markets, the European Central Bank (ECB) is preparing for the opposite in September. Concurrently, Trump plans to sanction Powell.
Rate Decisions and Cryptocurrencies
The Fed does not aim to reduce rates in the upcoming meeting. In previous months, while the ECB and others rapidly lowered rates, Powell chose to watch from the sidelines. In a global rate-cutting cycle, cryptocurrencies might have demonstrated enhanced performance, yet the Fed disrupted this. As it stands, amidst the uncertainty and fear induced by tariffs, the ECB might also refrain from cuts in September.
How, then, can the Fed cut rates amid rising inflation if even the ECB does not? This remains a challenging question to answer.
Key Meetings and Their Implications
According to internal sources, after eight rate cuts since June 2024, stability for September is seen as the main scenario. Considering ongoing negotiations concluding on August 1 and potential developments in US tariff policies, opinions might still shift, sources emphasized.
What will happen after August 1? Despite the original deadline on July 9, few seemed bothered. A delay to September would not surprise, and due to uncertainty, it is likely central banks will not cut rates. This scenario adversely impacts cryptocurrencies.
At this very moment, the House Committee is launching an investigation into Fed’s renewal efforts. Punchbowl reported this as breaking news, and it was an anticipated scenario. Powell may face challenging times ahead.
