U.S. Senator Elizabeth Warren (D-MA) recently called on the Federal Reserve to lower its interest rate target, a move that most analysts believe could have a positive impact on the cryptocurrency market. Warren's request is somewhat consistent with the position of cryptocurrency investors, although she has repeatedly proposed legislation and regulatory measures aimed at restricting the cryptocurrency industry in the past.

Senator Warren's change of position is somewhat ironic, as she has been critical of the cryptocurrency industry in the past and has tried to suppress its development through increased legislation and reporting requirements. However, her call for a rate cut could be a boon to the cryptocurrency market, as lower interest rates typically increase market liquidity, which could drive up cryptocurrency prices.

At the same time, Senator Warren's call undoubtedly provides new discussion points and market expectations for cryptocurrency market participants.

Senator Warren calls on Fed to cut rates immediately

U.S. Senator Elizabeth Warren and Democratic Senator Jacky Rosen of Nevada jointly wrote a letter to Federal Reserve Chairman Jerome Powell, calling for an immediate reduction in interest rates. Warren pointed out in the letter that the Fed's current interest rate of 5.5% has hindered economic growth and unexpectedly exacerbated inflation, which has remained above 3% for the past few months.

The letter stressed that high interest rates have led to rising costs for housing and auto insurance, which are the main factors driving the overall inflation rate. Warren and Rosen cited a report released by Bankcreek Capital Advisors on May 31, suggesting that lower interest rates would help reduce the cost of renting, buying and building a home, which is the largest monthly expense item for many Americans.

In addition, the senators mentioned that lowering interest rates would bring the United States in line with policies in Canada and the European Union. Central banks in both regions recently cut interest rates for the first time in years. The letter added that Sweden, Switzerland, Hungary and the Czech Republic have also cut interest rates.

Warren and Rosen warned that if the Fed continues to keep interest rates high, it could trigger a recession and cause a large number of workers to lose their jobs. They made it clear in the letter: "You have kept interest rates too high for too long. Now is the time to cut interest rates."

The letter reflects the concerns of some U.S. political leaders about the current monetary policy and proposes a rate cut to stimulate economic growth and ease inflationary pressures. Although the market generally expects that the Federal Reserve may not adjust interest rates in the short term, Senator Warren's call may trigger further discussion and scrutiny of monetary policy.

The market expects interest rates to remain unchanged, and Bitcoin bulls are bullish

The Federal Reserve is about to announce its next interest rate decision on Tuesday. Prior to this, the Federal Reserve has already released the CPI inflation data for May. According to the Federal Reserve's previous statement, they have made it clear that interest rates will remain at a high level for "an extended period of time."

After its May meeting, the Fed noted that "the Committee judges that it would be inappropriate to lower the target range until it has greater confidence that inflation is moving sustainably toward 2 percent." In addition, the Fed mentioned that job growth and the unemployment rate remain low, which may provide some room for rate hikes.

However, market expectations and the Fed's stance seem to differ. According to CME's FedWatch data, the market is 99% confident that the Fed will keep interest rates unchanged at its June meeting. In addition, the market is more inclined to expect the Fed to start cutting interest rates in September or November.

Although the Federal Reserve may keep interest rates unchanged, Bitcoin bulls are optimistic about the market trend. They believe that lower interest rates will eventually come, which will drive the cryptocurrency price higher.

Meanwhile, BitMEX co-founder Arthur Hayes said in a recent article that now is the time to "go long Bitcoin and then long shitcoins" in anticipation of multiple central bank adjustments. #加密货币 #美联储 #降息预期 #沃伦

Conclusion:

U.S. Senator Elizabeth Warren's call for a rate cut, while in stark contrast to her critical stance on the cryptocurrency industry, unexpectedly coincides with the market's expectations for increased liquidity. At the same time, the joint letter from Senators Warren and Rosen, and their concerns about the economic recession that could be triggered by the current high interest rate policy, highlights the urgent need for monetary policy adjustments.

At the same time, the views of BitMEX co-founder Arthur Hayes further strengthened this expectation, indicating that the cryptocurrency market may usher in new development opportunities against the backdrop of monetary policy adjustments.

Overall, although the Fed may not adjust interest rates in the short term, market expectations and the views of Bitcoin bulls indicate that there may be a trend of interest rate cuts in the future, which may have a positive impact on the cryptocurrency market.