The recent surge in cryptocurrency prices is linked to changes in U.S. economic policy and the intentions of Federal Reserve Chairman Jerome Powell.
Fed Lowers Interest Rates
The Federal Reserve announced a reduction in interest rates, effective Friday. Jerome Powell indicated that he would no longer insist on high rates to manage the relationship between tariffs and inflation.
Reasons for Rate Cuts
The decision to lower rates is driven by a deteriorating labor market, as evidenced by recent job loss statistics. This situation necessitates a reassessment of Fed policy.
Prospects for Cryptocurrency Growth
The rise in cryptocurrency is expected to be permanent through early 2026, although significant changes are anticipated to be moderate. Larger cuts, such as those sought by Trump, will not occur; instead, a reduction of 100-125 basis points is anticipated.
Changes in the Fed's policy could lead to sustainable growth in cryptocurrencies, although significant shifts in rates are expected to remain moderate.
