Recent remarks by Fed Chair Jerome Powell triggered a wave of pessimism among cryptocurrency investors. However, Kugler's resignation may signal a change in the Fed's trajectory.
Interest Rate Cuts by the Fed
To determine a rate cut, the Fed requires 12 votes, meaning seven members must support it. In the last meeting, two members expressed a desire for a cut and added dissent to the decision. Kugler announced his resignation, paving the way for the new member appointed by Trump, increasing the number of advocates for cuts to three.
Fed Members Speak Out
This week, Fed members made public statements following the interest rate decision. Kashkari emphasized, 'The Fed must respond to the slowing economy. Adjustments to policy interest rates in the near term remain appropriate.' Collins noted, 'Understanding uncertainty’s impact on the economy is vital,' while Daly stressed the need to adjust monetary policy to meet the Fed’s goals.
Market Expectations
Markets anticipate a rate cut in September. This has contributed to the recent rise in markets. However, Trump's actions can independently influence cryptocurrency prices, such as the newly announced additional 15% tax in Japan.
Changes in the Fed's composition and members' opinions could significantly impact monetary policy and interest rates. Investors are looking forward to concrete actions in September.
