Powell's uncertainty over interest rate cuts, while the Federal Reserve remains cautious about rate cuts, represents the impact on financial markets next year
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Bitcoin Strategic Reserve
The plan to establish a strategic reserve is already underway, with Republican Senator Cynthia Lummis proposing a bill to create the reserve. The bill proposes that the U.S. Treasury purchase 200,000 bitcoins annually until its reserves reach 1 million. According to the bill, the funding for purchases will come from the Federal Reserve's bank deposits and gold holdings. Barclays analysts believe that funding the strategic reserve will require Congressional approval and the issuance of new government bonds. Analysts also expect this plan to face strong opposition from the Federal Reserve.
Federal Reserve's Cautious Attitude on Rate Cuts
As expected, the Federal Reserve cut rates by 25 basis points. However, the Federal Reserve also revised its rate cut expectations for 2025, predicting only two cuts instead of the four predicted in September. Powell stated that the central bank will seek progress on inflation and added that what consumers feel is high prices rather than the impact of high inflation.
"Inflation levels have been volatile over the past 12 months. We are very aware that the magnitude of price increases is significant, and people are indeed feeling it, including prices for food, transportation, heating, and more. Therefore, the global inflation outbreak has brought immense pain. Now inflation itself has significantly decreased, but people still feel the rise in prices, which is their true experience."
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