Falling Bitcoin values influenced by inflation data, shrinking chances of Trump's significant interest rate reductions
In a move that could shake up the economic landscape, President Donald Trump's push for a major interest rate cut is likely to clash with the latest inflation data. The new figures are expected to undercut Trump's call for a significant reduction in rates, potentially putting the brakes on his ambitious plan.
Meanwhile, the crypto market is showing signs of instability, with a Fed official's warning casting a shadow over the digital currency market. The potential for a market crash looms large as investors grapple with the implications of this warning.
Trump's quest for lower interest rates is not limited to the Federal Reserve. He has identified alternative avenues to achieve his goal, one of which involves the Treasury Department's continued buying of its own Treasuries. This strategy, dubbed "QE without the Fed," could potentially bypass the Fed's current stance on interest rates.
The President has set a new target of 1% for interest rates, a significant decrease from the current range of 4.25% to 4.50%. This ambitious goal, if achieved, would mark a drastic shift in monetary policy.
However, it's important to note that the Federal Reserve Chair, Jerome Powell, had set a target for the federal funds rate around 1% in earlier years. By 2025, the actual policy rate range is between 4.25% and 4.50%, quite distant from the 1% target previously considered. This discrepancy underscores the challenges Trump faces in pushing for such a significant rate cut.
As the economic landscape continues to evolve, these developments promise to keep observers on the edge of their seats, as the interplay between political will and monetary policy becomes increasingly complex.
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