📉 US Treasury Yield Expectations: Trump Policies + Federal Reserve Movements Trigger Market Volatility! 🇺🇸💵
Although Trump's trade and tax policies may pose a threat to the bond market, Wall Street still sees signals from the Federal Reserve, predicting that short-term US Treasury yields will decline by 2025. Strategists generally forecast that the yield on 2-year US Treasury bonds will drop by at least 50 basis points in the next 12 months, to 3.75%. 📉
Why does this affect the crypto market?
✅ Short-term interest rates decline: If the Federal Reserve's policies indeed lead to a drop in 2-year Treasury yields, market liquidity may improve, and risk assets (such as Bitcoin and altcoins) may benefit, increasing the likelihood of short-term capital inflows into the crypto market.
❌ Long-term interest rates remain high: However, the yield on 10-year US Treasury bonds is expected to only slightly decline, and persistently high long-term rates may still exert pressure on the crypto market, especially regarding high-leverage trading and speculative behavior.
Despite the uncertainty brought about by Trump's policies leading to increased market volatility, the market generally believes that the Federal Reserve may continue to maintain a flexible interest rate cut path. For crypto investors, this change provides more investment opportunities, but it is also necessary to remain vigilant and adjust positions in a timely manner. 💡
