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Key Insights:
- President Trump calls for an unprecedented 300 basis point Fed interest rate cut.
- U.S inflation is higher than the previous month.
- The US House just passed a Bitcoin and crypto market structure bill for floor debate consideration.
As the main driver of the global financial economy, the U.S. remains an integral part of the system that determines how everything else plays out. Recently, the nation has been at the forefront of featuring itself as an important figure in the cryptocurrency space.
The response to these clarion calls stems from their pro-crypto President, who has been backed by a couple of his party members.
That said, it is worth assessing how the recent U.S. moves could shape the future of markets. They include President Trump’s calls, the inflation rate, and the market structure bill, but what do they entail?
All About President Trump’s Recent Calls
President Trump extended his fight with Jerome Powell as his efforts to cast out the Fed Chair escalate. Trump does not view Powell as one who aligns with his plan due to his grounded position on rate cuts.
Through a post on Truth Social, Trump called for the Fed to cut the interest rate by 300 basis points (bps). Trump noted that by doing so, $1 Trillion a year would be saved.
However, this did not seem right as Kobeissi Letter noted that the largest ever individual cut was 100 bps, back in March 2020.
A cut in the Fed interest rate usually leads to a surge in prices of risk-on assets like Bitcoin and crypto, stocks, and bonds, among others. But why? Participants are able to borrow money to invest in these assets without paying high interest.
Still on Trump’s calls, he announced that they had reached a trade agreement with the President of Indonesia, and details would follow soon. It could be the start of streamlining U.S. tires with Southeast Asia, which earlier became members of BRICS.
These calls, if well managed by experts, could put the U.S. in a very great position as global finance takes a new shape.
Why is Inflation Higher Than in Previous Months?
As noted earlier, President Trump’s calls need to be approached with a pinch of salt as analysts have seconded it. CryptoQuant author, Darkfost, stressed the importance of letting Powell and the Fed make decisions on a rate cut.
As of press time, June CPI showed that the Core Inflation Rate MoM and YoY were at +0.2 and 2.9% respectively. Additionally, the Inflation Rate MoM and YoY were at +0.3 % and 2.7%, which were in line.
In his post, Darkfost wrote,
That followed after the news that U.S. inflation was higher than the previous month, but almost what was expected. It affirmed that the Fed was making informed decisions even though the tariff showdown was yet to be finalized.
With all these, it denoted a mild dovish market despite the headline being a bit sticky. That made the odds of a rate cut in September surge higher.
To add more confluence while in anticipation of how markets could unfold, taking note of the Dollar Index (DXY) and Treasury yields was paramount. A fill in both could spark a pop in BTC and other risk-on assets.
What’s Next on the Market Structure Bill?
Wrapping up on how these developments could shape the financial markets, the U.S House just passed the Bitcoin and Crypto market structure bill for floor debate consideration, as per Crypto Rover.
The market structure bill, which entails the Clarity Act and the Anti-CBDC Surveillance State Act, is waiting to pass. However, delays continue as Democrats continue to raise questions.
Meanwhile, the U.S. House Committee affirmed participants that the developments were no longer promises but a priority. This would ensure the U.S stayed relevant in these new developments.
These developments could set the stage for how the financial markets are going to look as Trump leads the U.S. for his second term.
Disclaimer
This article is for informational purposes only and provides no financial, investment, or other advice. The author or any people mentioned in this article are not responsible for any financial loss that may occur from investing in or trading. Please do your research before making any financial decisions.
