Donald Trump criticizes Federal Reserve Chair Jerome Powell, calling for interest rate cuts to support the economy.
Trump's Rate Cut Proposal and Economic Implications
Donald Trump criticized Jerome Powell for high interest rates, referring to him as "Mr. Too Late." On July 23, Trump stated that the current high rates hurt families in the U.S. and suggested a 3% cut, which could save the country $1 trillion annually.
Impact of Rate Cuts on Cryptocurrencies
Trump's demand for rate cuts aims to lower U.S. borrowing costs amid economic concerns. This attempt to influence monetary policy could affect financial markets, including risk assets such as cryptocurrencies. Analysts note that shifts in interest rates could directly impact U.S. Treasuries and cryptocurrencies, leading to increased investments in this sector.
Historical Correlation Between Rate Cuts and Bitcoin Growth
Historically, similar demands from Trump in 2019 coincided with notable market volatility, prompting movements in cryptocurrencies. Currently, Bitcoin is trading at $118,029.91, with a market cap of approximately $2.35 trillion. Despite a minor decline of 1.04% in the past 24 hours, BTC has rallied 27.23% over the past 90 days, reflecting its macro-sensitive nature.
Analysts emphasize that potential shifts in economic policy could encourage crypto adoption. Historical trends suggest rate cuts are often associated with increased investments in risk assets like cryptocurrencies.
