President Donald Trump has called on Federal Reserve Chair Jerome Powell to lower interest rates. This statement raises questions about the influence of policy on US economic competitiveness and financial markets.
Trump's Demands for Rate Cuts
President Trump has strongly urged Jerome Powell to lower interest rates, citing threats to the competitiveness of the US economy. As of July 22, White House Press Secretary Karoline Leavitt confirmed the administration's stance, stating that rate cuts are a necessary step to support the economy. The current policy rates standing at 4.25%–4.5% are viewed by Trump as putting the country at a disadvantage compared to other economies.
Cryptocurrency Market Response
Historical data indicate that during previous pressures on the Fed from 2018 to 2020, prices for Bitcoin and Ethereum have risen in response to dovish monetary signals. Currently, Bitcoin's price stands at $116,729.45, with a market cap of $2.32 trillion, holding a 59.63% market dominance. Despite a 1.43% decrease in the last 24 hours, Bitcoin has shown resilience, boasting a 27.73% increase over 90 days.
Financial Market Reactions to Changes
Coincu's analysis indicates that possible shifts in financial strategies and asset allocation might occur if rate cuts coincide with reduced conventional yields. This may lead to increased allocation of both Bitcoin and Ethereum in investors' portfolios, given their historical responses to dovish policies. Additionally, this is expected to affect volatility levels in Layer 1 and DeFi markets.
Donald Trump's demands for interest rate cuts present significant challenges to the Federal Reserve, which could impact both traditional financial markets and the cryptocurrency market.
