Is it possible that Powell secretly shorted?
Powell's statements at the Federal Reserve are usually the focus of market attention, especially as his hawkish stance often leads to significant volatility in financial markets. Recently, his remarks about 'not wanting the Federal Reserve to change the law' are based on the existing legal framework, but the market tends to overinterpret, especially as cryptocurrencies and Bitcoin gradually become core components of policies in some US states.
However, Powell's remarks do not mean that the Federal Reserve will completely reject Bitcoin or cryptocurrencies; rather, they emphasize the necessity of regulation within the legal and policy framework. From his recent speeches, it appears that the Federal Reserve is still focused on the dual goals of inflation and economic growth. Although he is cautious about cryptocurrencies, it does not mean he will directly suppress their development.
Trump promised in his speech that if elected president, he would take a series of measures to support Bitcoin and the cryptocurrency industry, including establishing a Bitcoin Presidential Committee, preserving Bitcoin jobs, and encouraging power plants to strengthen electricity supply for Bitcoin mining.
At the Bitcoin 2024 conference, Trump publicly stated that if he could return to the White House, he would ensure that the government retains 100% of the Bitcoin it owns and would classify Bitcoin as a strategic reserve asset for the United States. Data shows that the US government currently owns over 210,000 Bitcoins, worth approximately $14 billion.
Trump believes that the market value of Bitcoin will surpass that of gold in the future. 'I will devise my plan to ensure that the United States becomes the cryptocurrency capital of the world and a Bitcoin superpower.'
The rate cut in the early morning is the last interest rate decision of 2024 (and also the last Federal Reserve meeting during President Biden's term)!
(The Federal Reserve Act) stipulates what we can own, which is something Congress should consider, but we do not want the Federal Reserve to change the law.
This sentence is the core of Powell's hawkish remarks last night; he simply articulated the existing laws in the US, and the market overinterpreted it!
This does not conflict with Trump and the policies that various states are already gearing up for, so the obvious short-term decline, especially in altcoins, can only be said to be a necessary breakdown before a breakthrough. Today's decline has made me more certain that the intensity of the second charge will not be small!
I believe that regarding 2025, the slowing pace of interest rate cuts next year actually reflects the higher inflation data we have already seen this year, as well as the expectation that inflation will rise in 2025. You can see from the Summary of Economic Projections (SEP) that we believe the risks and uncertainties surrounding inflation are increasing. Nevertheless, we still expect to continue lowering interest rates.
The answer to whether there will be interest rate cuts next year is still the same old story, a very official ambivalent response!
As for how many more days Powell can stay in office, that is not for us to worry about; we won't speculate. Trump only has the power to nominate, not to appoint! So it’s normal for Powell to speak assertively!
The short-term fluctuations currently facing the cryptocurrency market may provide investors with an opportunity to reposition. For Bitcoin and other crypto assets, although there may be significant volatility in the short term, the long-term fundamentals remain positive. Especially with Trump's positive attitude towards Bitcoin and the supportive policies from several states, this may inject new momentum into the market.
Overall, while Powell and Trump's policy positions differ, all of this brings more uncertainty to the cryptocurrency market. For investors, understanding the context of these policy changes may help make more rational investment decisions. As for whether Powell can continue to serve as the chair of the Federal Reserve, it may be difficult to see a resolution in the short term, but market changes could become a factor prompting a shift in his stance.
The above is my exclusive analysis; if you liked it, giving a thumbs up, commenting, or sharing would be the greatest support for me!
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