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The price of Bitcoin 
$104,121 has fallen to $97,335 at the time of this writing. Just hours earlier, it was above $100,000. While this dip may be disheartening, fluctuations in cryptocurrencies are commonplace and not entirely surprising. So, what does Fed member Waller have to say?
Latest Fed Statements
Recent data has been unfavorable for cryptocurrencies. Additionally, scenarios suggesting two interest rate cuts by the Fed this year have deteriorated. Although the inflation data released yesterday was relatively calm, the series of poor reports did not alter the expectation that interest rate cuts will be further delayed.
Waller’s statements, important highlights include:
- December’s inflation data was very positive.
- Inflation seems to be returning to trend; I hope this continues.
- If surprises like last year occur, the Fed may have to remain on hold, but I’m optimistic about continued declines in inflation.
- Inflation has been close to target in six of the last eight months; it is reasonable to expect this will continue.
- If current expectations for inflation are met, we could start interest rate cuts in a few months.
- I don’t think we can overlook March for potential rate cuts.
- If the data supports it, three or four rate cuts might be possible this year.
- Some strong employment reports from December compensated for previous weak data.
- I don’t believe tariffs will have a significant effect on inflation.
- Tariffs will have a marginal and temporary impact on prices, but not a lasting effect on inflation.
- I believe inflation will continue moving toward our target; any stickiness will dissipate.
- I may be more optimistic about inflation than my colleagues.
While Waller reiterated that interest rate cuts may be delayed this year, he did not convey overly negative sentiments. A last-minute development regarding the ETF application for Litecoin has emerged. Additionally, the countdown to January 20 is now in hours, and unless the recent Bitcoin drop turns into a news-selling case, an upward trend may continue. In the coming days, the pressure from the U.S. on cryptocurrencies is expected to ease.
Futures interest rate market traders began pricing in the likelihood of the Fed cutting rates in May, close to the June meeting following Waller’s comments.
