Federal Reserve Chair Jerome Powell is tiptoeing through a minefield as Donald Trump barrels toward his second term as president. The central bank is trying to maintain its image of neutrality while secretly bracing for the economic chaos Trump’s policies could unleash.
Powell claims the Fed won’t speculate on Trump’s plans, but insiders reportedly say a different game is being played behind the scenes. After Trump’s November win, Powell went on the defensive, insisting the Fed wouldn’t adjust interest rates based on “guesswork” about future trade and immigration policies.
“We don’t guess, we don’t speculate, and we don’t assume,” Powell announced at a press conference. But as the dust settles, the Fed’s actions suggest otherwise. Trump’s upcoming term is already affecting its inflation forecasts and interest-rate decisions.
Fed’s mixed signals
Last week, the Fed cut rates by another quarter point, making a full percentage point cut since September. Powell’s message was that the economy still needs some help. But projections released alongside the cut show a more hawkish stance for the future.
Officials are now predicting only two rate cuts in 2025 and two more in 2026, down from earlier expectations of four cuts next year. The inflation numbers don’t help. The Fed now expects inflation (excluding volatile food and energy prices) to dip to 2.5% in 2025, worse than the 2.2% forecast just months ago.
And here’s the thing: 15 out of 19 Fed officials now believe inflation could overshoot their forecasts. Back in September, only three saw that risk. Behind closed doors, Fed officials are sweating over the potential for Trump’s trade and immigration policies to undo recent progress.
Powell, however, is playing coy, pointing to firmer inflation readings as the culprit. Meanwhile, the labor market and supply chains—two big factors in the inflation cool-down—could unravel. Powell himself admitted during a press conference that the Fed’s current-year inflation projections had “kind of fallen apart.”
Trump’s immigration policies loom large over inflation
Trump’s plans to crack down on immigration have Fed officials especially worried. His promises of mass deportations and stricter border controls could shrink the labor pool, tighten the job market, and send wages soaring. The supply-side expansion, which had been keeping inflation in check, could be thrown into reverse.
Governor Adriana Kugler, known for her hawkish tendencies, hasn’t been shy about her concerns. While she backed a half-point rate cut in September, she recently hinted that further easing might not be possible if labor-force growth stalls.
The Fed’s models show a tight labor market could lead to higher prices, putting pressure on businesses to pass those costs to consumers.
Powell, however, has been trying to keep his colleagues from linking Fed policies directly to Trump’s moves. Behind the scenes, he’s urging restraint, hoping to avoid the appearance of political bias. “We need to focus on the data, not the politics,” Powell reportedly told colleagues.
The memory of 2018 is fresh in many minds. During Trump’s first term, his trade war forced the Fed to lower rates to offset its economic impact. But this time, things are different. Inflation is no longer an abstract threat. Businesses and consumers are already wary of rising prices, making the Fed’s job even trickier.
Stress tests expose cracks in the banking system
While inflation and labor concerns dominate headlines, the Fed is also grappling with cracks in the banking system. The 2023 panic among mid-sized banks exposed weaknesses in the system’s ability to handle rapid rate hikes. Stress tests, once a key tool for assessing banks’ resilience, have become a point of contention.
In 2019, the Fed proposed opening up its test models to public scrutiny, arguing it would make the system more transparent. Banks pushed back, claiming the models were too rigid and encouraged “gaming” the system. The Fed eventually scrapped the idea, citing concerns over a “model monoculture.”
But the debate hasn’t gone away. Banks argue that without consistent rules, they can’t make meaningful long-term changes to their portfolios. And the lawsuit filed this week against the Fed’s stress test framework only adds to the pile.
Critics believe the tests are redundant, given the Fed’s other capital requirements, and could even encourage reckless behavior.

#FederalReserve #Trump #CryptoNews #GMTBurnVote #BitwiseBitcoinETF

$BTC $ETH $BNB

The central bank surprised with much less optimistic forecasts than expected.

The correction in the cryptocurrency market is total. Bitcoin (BTC) has lost more than $10,000 in value since the highs marked on the 17th of last Tuesday. At the same time, the market has lost 7% of its market capitalization in the last 24 hours. Are there reasons for concern?

$BTC
$ETH

$XRP
The reality is that the market is unclear. Some strategists point out that bitcoin and cryptocurrencies' reaction to the latest monetary policy decision by the Federal Reserve (Fed) underscores bitcoin's vulnerability to external factors. It is worth noting that the U.S. central bank has recently lowered interest rates but announced that it will lower them fewer times than expected in 2025 and that its projections for next year are less optimistic: inflation will rise due to greater economic growth and lower unemployment.

The latest decisions by the U.S. Federal Reserve (Fed) pose serious challenges to the development of the cryptocurrency market in 2025. Despite the third interest rate cut of the year, which lowered rates to 4.25–4.5% annually on December 18, the regulator's overall stance remains stricter than experts had anticipated, largely due to its cautious outlook on inflation. According to an analytical review by Catarina Saraiva, only two rate cuts are expected next year, reflecting the Fed's conservative approach to monetary policy.
Adding to these challenges is the projected growth of the Personal Consumption Expenditures (PCE) inflation index and core PCE inflation. The Financial Times notes that the Fed's tightening policy is driven by heightened attention to inflation risks and a commitment to ensuring the stability of the U.S. economy. Stock markets reacted immediately, with the Dow Jones, S&P 500, and Nasdaq indices dropping by 0.38%, 0.56%, and 0.64%, respectively.
The cryptocurrency market also faced significant pressure, with the total capitalization of digital assets declining by 4.62% to $3.48 trillion. According to Reuters, the combination of moderate rate cuts and the Fed's hawkish rhetoric could lead to prolonged market instability. Analysts at BloomingBit are warning investors to brace for heightened volatility and an extended period of uncertainty, underscoring the Fed's monetary policy as a central influence on market trends.

#CryptocurrencyMarket #FederalReserve #MarketVolatility #DigitalAssets #InflationRisks

In a bold statement, Federal Reserve Chair Jerome Powell has clarified that the Fed has NO intentions of getting involved in creating a Bitcoin strategic reserve or stockpiling Bitcoin. 🛑
Powell emphasized that the Federal Reserve is NOT allowed to own Bitcoin, and there are NO plans to change that stance anytime soon. This comes as a clear message to the crypto world: Don’t expect the Fed to back Bitcoin as part of any reserve strategy.
💥 With Bitcoin’s rise and fall often tied to major financial announcements, this news could have a massive impact on how the market moves. Could this be a sign that traditional financial powers are distancing themselves from Bitcoin, or is it just a temporary stance?
🔮 Stay tuned as the crypto world reacts to Powell's comments! The future of Bitcoin just got even more interesting. 🧐
#BinanceAlphaAlert #FederalReserve #CryptoNews #CryptoMarket

🏦💬 In a recent statement, Federal Reserve Chair Jerome Powell addressed the central bank’s position on Bitcoin ownership:

“We’re not allowed to own Bitcoin. The Federal Reserve Act says what we can own, and we’re not looking for a law change.”

This clarification comes amid discussions about the potential establishment of a U.S. Bitcoin Strategic Reserve.

Key Points:
• Legal Constraints: The Federal Reserve is legally prohibited from holding Bitcoin under the current Federal Reserve Act.
• No Legislative Pursuit: Chair Powell emphasized that the Fed is not seeking changes to these laws to accommodate Bitcoin holdings.
• Market Impact: Following Powell’s remarks, Bitcoin’s value experienced a notable decline, reflecting the market’s sensitivity to regulatory perspectives.

Discussion:
Chair Powell’s statements underscore the Federal Reserve’s cautious approach toward integrating cryptocurrencies like Bitcoin into its asset portfolio.

Questions for the Community:
• What are your thoughts on the Federal Reserve’s stance regarding Bitcoin?
• How might this position influence the broader adoption of cryptocurrencies in the financial sector?

Stay Informed:
For more updates on cryptocurrency regulations and market movements, follow our page and join the conversation.

Hashtags:
#FederalReserve #JeromePowell #Bitcoin❗ #FinancialRegulation #FOMC_Decision

Financial markets experienced a major shock following an unexpected statement by Federal Reserve Chairman Jerome Powell regarding the outlook for monetary policy in 2025. Despite the recent third consecutive cut to the key interest rate, his cautious forecast about further easing of monetary policy triggered a massive sell-off in the markets.

Investor reaction was immediate: the S&P 500 index dropped by 3%, while the yield on 10-year Treasury bonds reached its highest level in the past seven months. Such a sharp drop in the stock market on the day of a Fed meeting had not been seen since September 2001, when the index fell by nearly 5%.
The situation is further complicated by the anticipated return of Donald Trump to the White House. His promises to raise tariffs on U.S. trading partners and lower taxes could exacerbate inflationary pressures, significantly increasing uncertainty for market participants.
High-risk assets were the most sensitive to the change in sentiment. Goldman Sachs’ index of the most heavily shorted stocks fell by 4.9%, while the measure of loss-making tech companies declined by 6.4%—the largest drop in two years. Tesla shares lost 8.3% of their value, and Bitcoin, which had recently approached the $108,000 mark, dropped by 5%.

Experts note that the market was unprepared for this turn of events. According to Tom di Galoma of Curvature Securities, the Fed is shifting to a more neutral stance as it awaits further actions from the new administration. Current forecasts suggest fewer than two rate cuts of a quarter percentage point each throughout 2025, a scenario even more conservative than what the Fed’s official projections indicate.

#FederalReserve #MarketVolatility #BitcoinPrice #TeslaStock #TradingStrategy

In a seismic shift for global markets, Federal Reserve Chair Jerome Powell’s latest remarks sent shockwaves through Wall Street, triggering the steepest single-day drop in the S&P 500 since early 2020. A staggering $1.8 trillion in market value evaporated as Powell’s hawkish tone crushed hopes for a year-end recovery, extinguishing dreams of the long-awaited “Santa Claus” rally.
Wall Street in Turmoil
The Fed’s resolute stance on keeping interest rates higher for longer has left investors rattled. As market sentiment hangs by a thread, whispers of economic strain and political maneuvering, including potential interventions by figures like former President Donald Trump, have added to the drama.
Crypto: The Calm in the Storm
Amid the chaos in traditional markets, the cryptocurrency sector has proven to be a surprising beacon of stability. Once dubbed the "wild west" of finance, digital assets have held steady, defying the intense selling pressure that has gripped stocks and bonds.
This divergence underscores crypto’s growing resilience and its evolving role as an alternative in uncertain times. While traditional markets crumble, Bitcoin, Ethereum, and other major assets have maintained steady trading ranges, reinforcing their appeal as a hedge against macroeconomic volatility.
What’s Next?
With volatility likely to remain high across asset classes, traders are bracing for more turbulence ahead. Upcoming economic updates and political reactions could further shake markets, as Powell’s speech has laid the groundwork for a tense financial landscape.
Takeaways for Binance Users
1. Opportunity Amid Uncertainty: Market volatility often breeds opportunity. Crypto’s relative stability could signal a prime moment for strategic trades.
2. Diversify Smartly: As traditional markets falter, digital assets continue to gain ground as a viable diversification tool.
3. Stay Informed: With economic and political headlines likely to dictate market moves, staying updated on the latest developments is crucial.
Final Thought: Powell’s hawkish tone may have spooked Wall Street, but it’s also a wake-up call for investors to rethink their strategies. Whether crypto becomes the hero of this turbulent financial chapter remains to be seen, but one thing is certain: the digital asset market is not to be underestimated.
#BinanceNews #CryptoResilience #FederalReserve #MarketVolatility #TradeSmarter

The S&P 500 suffered its sharpest single-day decline since 2020, wiping out an astonishing $1.8 trillion in market value after Federal Reserve Chair Jerome Powell's hawkish tone on interest rates. Hopes for a year-end "Santa Claus rally" have been dashed, leaving traditional markets in turmoil.
📉 Key Highlights:
S&P 500 Sell-Off: Investors reacted sharply to Powell's remarks, fearing prolonged economic pressure.
Crypto Resilience: Despite the chaos, cryptocurrencies remain stable, demonstrating surprising strength amidst market-wide sell-offs.
Political Angle: Speculations are rising that figures like Donald Trump may criticize Powell's monetary policies, potentially influencing market sentiment.
With uncertainty gripping global markets, traders should prepare for heightened volatility across stocks, crypto, and bonds. Powell's remarks have intensified concerns over the economic outlook, and all eyes are now on the Federal Reserve's next steps.
🔎 What’s Next?
Will cryptocurrencies continue to decouple from traditional markets?
How will political pressures influence Powell’s decisions?
Are further declines ahead for the stock market?
Stay alert as market sentiment remains fragile and volatility takes center stage.
#StockMarket #CryptoNews #FederalReserve #PowellSpeech #Volatility

Powell’s Speech Triggers Market Turmoil, Crypto Defies the Storm
In a dramatic turn of events, the S&P 500 experienced its steepest single-day drop since early 2020, wiping out a staggering $1.8 trillion in market value. This sell-off was triggered by Federal Reserve Chair Jerome Powell's recent comments, which shattered investor hopes for a year-end recovery. With the Fed signaling a firm stance on interest rates, the dream of a “Santa Claus” rally now seems out of reach, leaving market sentiment on edge.
Despite the chaos in traditional markets, the cryptocurrency sector has demonstrated remarkable stability. Digital assets, often considered highly volatile, have maintained steady levels even as global markets face intense selling pressure. This divergence highlights crypto's evolving role in a turbulent financial landscape.
As uncertainty grips the markets, traders and investors are left speculating on the long-term implications of Powell’s tone. The possibility of prolonged economic strain has led to whispers of political figures, including former President Donald Trump, stepping into the spotlight to challenge the Fed's current approach to monetary policy.
With volatility expected to remain high across asset classes, market participants are bracing for further turbulence. All eyes are now on upcoming economic updates and political reactions, as Powell’s speech has set the stage for heightened drama in the financial world.
#FederalReserve #InterestRates #CryptoMarket #EconomicOutlook

Federal Reserve Rate Cut: A Game-Changer for Crypto Markets? 🚀🔥
On December 18, 2024, the U.S. Federal Reserve is anticipated to reduce interest rates by 25 basis points, lowering the federal funds rate to 4.25%–4.50%. This decision is expected to create ripples across the financial landscape, particularly within the cryptocurrency sector, potentially setting the stage for transformative market movements.
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Increased Appetite for High-Risk Assets
Lower interest rates tend to push investors away from traditional, low-yield options such as savings accounts or government bonds. This shift often leads to a search for higher-return opportunities, and cryptocurrencies—known for their explosive growth potential—could become a prime destination for this capital influx. The result? Heightened demand and possible bullish momentum in the crypto space.
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Short-Term Price Volatility
The announcement of a rate cut could trigger immediate turbulence across financial markets. Given their inherently volatile nature, cryptocurrencies are likely to experience dramatic price swings as traders and investors adjust their strategies to align with the new monetary environment.
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Potential Challenges for Stablecoins
While a rate cut could be a tailwind for the broader crypto market, stablecoin issuers may face headwinds. Many stablecoins are backed by U.S. Treasury assets, and reduced yields on these reserves could squeeze profits. This development might impact the perceived reliability of stablecoins, adding complexity to an already evolving sector.
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As the Federal Reserve's decision approaches, the crypto industry stands at a crossroads. Although the anticipated rate cut could serve as a catalyst for growth, other factors—including regulatory developments, advancements in blockchain technology, and broader economic conditions—will continue to shape the industry's trajectory. December 18, 2024, could mark a significant turning point for the future of digital assets.
#CryptoCatalyst #BTC2024 #FederalReserve