For people who are bored of reading about this i am sorry, for now it is the most impactful decision effecting the crypto price so that is where most of my focus is.

Some things you might not know.

Trump nominated Powell to serve as Fed Chair in 2017.Biden re-nominated Powell for a second term in 2021.Powell is a republican.The president does not have the power to fire the FED Chair.(Trump says he could)Powells current term as Fed chair ends in May 2026.The US government have no say or (direct) influence in the interest rates set by the FOMC.(Trump wants to change that)Trump has publicly stated he would not nominate Powell again if he was re-elected.For months many democratic leaders have been urging Powell to lower rates, including open letters to Powell and the Fed.👇

Since nominating Powell as the Fed chair, Trump, for the most part has had little praise for him, Trump had even spoken of firing Powell when he was president but this never happened, in the history of the FED this has never happened, there is no precedent or laws applicable to firing an acting FED chair.
Insiders close to Trump have said if re-elected Trump wants to change laws and give the President power over the central banks policy, this would be met with worldwide outrage as it has the potential to seriously impact the worldwide economy.

The Trump game

Love him or hate him i think few would deny Trump knows how to influence people and get what he wants.
If we rewind back to February of this year, Trump was making public accusation that Powell and other Fed members were politically corrupt and they would lower interest rates to help the cause of the democratic party in an election year.
High interest rates = higher cost of borrowing money = more financial pressure on the vast majority of the American people. (Lower rates=happier voting population, less likely to want change)
But wait interest rate cuts never happened, Trump is an idiot?
Trump is either an idiot or he made public accusations of corruption(5 months ago) to lead to the exact point we find ourselves in today.
If the Fed had cut rates in the months following these accusations then Trumps claims are justified and the Fed are corrupt.(Thats what Trump and his supporters would say)
If the Fed dont cut rates then Trump knew the economy would probably reach the point it is currently at, only months before election.
A vast number of the voting population are suffering because of the Feds restrictive policy, Trumps promises of lowering rates, lowering taxes and freeing up money for the American people must be sounding better and better these days, even if you are a democrat.

Back to the FED

If Powell and the Fed are not swayed by political agenda they will likely cut rates by 25bps in September and possibly again in november(If future readings support this)
I personally think if Powell and the fed were backing the democrats then a July cut would seem likely (there is no cut in August) a July cut is priced at 4.7% currently on CME Fedwatch, it is extremely unlikely and if it did happen it would be the end of Powell if Trump wins the election.

The conspiracy angle

The Fed is not immune to political agenda 👇

Lets hypothetically imagine Trump and Powell have an agenda
Trump has mostly said he wants Powell out so please take this as pure speculation, i do know that Trump will say/do almost anything to suit his agenda, if that means keeping Powell around for 4 more years so be it.

How does Powell keep his job (assuming Trump wins) while also trying to rescue a failing US economy?

Powell keeps rates higher for JulyPowell keeps rates higher for September(If the labour market is not on the brink of collapse)Powell lowers rates by 50bps(not 25) in November and again in December to shock the flatlining economy back to life.Trump would enter office with his campaign promises already on the road to completion (Powell would likely stay as Fed chair for 4 more years)

This is all absolute speculation and it relies heavily on how the labour market holds up in the coming months.

Tomorrow we will have HUGE impact CPI data and unemployment.

Firstly for anyone who gets lost with the CPI, Core CPI, Pce , Core Pce.
Core readings are without food and energy.
PCE and CPI are determined by basically the same things, the weight of each reading that makes up for the CPI or PCE numbers is calculated slightly differently.
Other key differences,
CPI is only for urban areas and does not include expenses paid for on behalf of consumers like Medicare or insurance paid by employers.Pce includes all American household spending, including Rural areas and includes spending made on behalf of consumers(Medicare,Insurance paid by employer), it also includes spending of non-profits.

The Feds prefered gauge of inflation is PCE.

As for tomorrow, most analysts are predicting readings mostly as forecast , i think CPI m/m might be the only shock due to high energy costs.

If the numbers come out higher across the board it will be bad for crypto, this is unlikely.
If Core CPI m/m and CPI y/y come out lower it will be good for Crypto, even if the monthly CPI m/m reading comes out a little hot due to energy costs.
If the readings come out as expected it would be slightly Bullish for Crypto.(If unemployment doesnt give a shock)

For me Unemployment is key

The FED can delay or downplay conditions for political reasons but if the unemployment numbers keep going up or get substantially worse then it cant be ignored, they cant kick the can down the road any longer, it will lead to emergency policy changes(lowering rates). Trump would still win if this happened 🤔

Tomorrow will have high volatility during these readings, like i have said in the past week, there is a LOT of pent up uncertainty waiting to hit the markets, Powell didnt unleash that storm but it is there and ready to cause havoc.

High impact readings like these could be the catalyst to unleash the storm.

I am mentally tired so if i made any spelling mistakes or i sound nonsensical then please forgive me🤪

Please trade safely tomorrow or take the day off.

Peace

#TheWolfThatWins #US_Job_Market_Slowdown #Market_Update #BinanceTournament