The main cryptocurrencies informed night losses, analysts saying that Wednesday’s Fed’s decision underlined President Trump’s growing influence on the Central Bank, strengthening the long-term optimistic case for crypto.
The Fed has maintained the stable reference interest rate at 4.25% as expected, and President Jerome Powell has reduced prospects for reducing the rate reduction in September, stressing that the central bank is focused on inflation control – not on government loan or home mortgage costs that Trump wants to reduce.
Powell’s comments have shaken the cryptography market, Bitcoin (BTC) falling at $ 116,000. XRP, Ether (ETH) and Solana (soil) also fell, shaking up the leverage of the term markets.
However, these losses were reversed. At the time of writing time, BTC was negotiated at $ 118,400, with XRP and ETH changing hands at $ 0.00314 and $ 3,870, according to Coindesk data. The Coindesk 80 index, a wider market gauge, oscillated nearly 915 points, up 0.8% over the 24 hours.
Jimmy Yang, co-founder of Orbit Markets, said that Fed’s decision overnight had revealed a threat to Fed’s independence.
While the central bank held stable prices, two decision -makers – the vice -president of supervision of the supervision Michelle Bowman and Governor Christopher Waller, both appointed to the board of directors by President Donald Trump – are dissident, promoting a drop in rate.
Trump has repeatedly criticized Powell to keep high interest rates and cost the United States to billions of dollars. Note that Wallet and Bowman have pleaded publicly for rate drops in recent weeks.
“There are increasing concerns about the independence of the Fed, because two of the people appointed by Trump voted for a drop in rate last night; this should strengthen the arguments in favor of the long -term crypto,” Yang told Coindesk.
He added that no reduction in immediate rate in view, the market could continue to negotiate largely without direction, pending new catalysts – the CPI version of July.
“The ICC should increase when the prices come in the coming months. Cryptocurrencies could initially sell alongside wider risk assets. However, if the fears of inflation persist, Crypto could rebound while a hedge story reappears, in particular for Bitcoin,” said Yang.
Greg Magadini, director of derivatives in Amberdata, said that if the Fed’s decision was in accordance with expectations, the concerns about the independence of the Fed were lingering.
“The biggest imminent question of this year for the bond market is around the independence of the Fed. Wednesday’s decision helped the Fed defend its independence. However, if Powell was licensed or begins to reduce rates too early, I expect hard assets (BTC, in particular) would slow are considerably.” Today, American credit markets depend on the independence of the Fed. “
Magadini explained that the bond markets continue to priced in long-term inflation, which weakens the case of rapid reductions in the shooting rate at ultra-basic levels, as Trump wished.
“We have seen long -term yields increase a lot from Trump elections. The 10S30 went from 15 SBPS to 55 SBPS and 2S10 from 5BPS to 45 SBPS.
This means that the continuous long -term inflation bond market, especially since “real yields” are historically positive … if inflation should stay where it is today, “said Magadini.
