Trump's public pressure on the Federal Reserve, rather than being a 'policy suggestion', can be seen as a carefully designed psychological war on the market. This guy directly stated, 'The next Federal Reserve chairman must immediately cut interest rates', which essentially throws the central bank's independence into the political arena. As a trader who makes a living by watching candlestick charts, I smell a familiar scent—when power begins to directly command the printing press, the market is not far from severe turbulence.
1. The Federal Reserve's 'independent mask' has been torn off
Historically, the Federal Reserve at least maintained the facade of 'data-driven decision-making', but now Trump has directly overturned the table: first threatening to fire Powell under the pretext of renovation overruns, and then suddenly dismissing Governor Lisa Cook, clearly aiming to place his own people in the decision-making body. Ironically, the only Federal Reserve governor to vote against the rate cut in September, Stephen Moore, was a confidant of Trump, complaining that the rate cut was not large enough.
My interpretation: This blatant intervention has transformed the Federal Reserve from an 'economic stabilizer' into a tool for corporate bailouts. Referring to the case of Turkey's Erdogan intervening in the central bank, leading to the lira's collapse and inflation soaring to 85%, once dollar credibility collapses, Bitcoin may benefit in the short term from safe-haven funds, but in the long term, it will be caught in the liquidity vortex alongside U.S. assets.
2. Interest rate cuts are not a 'magic bullet' for the market, but a sugar-coated bullet.
Trump's core motivations for pushing for interest rate cuts are threefold: Tariff war relief (low interest rates counteract tariff costs), stock market embellishment (creating an illusion of prosperity), and alleviating debt pressure (U.S. Treasury interest has already exceeded defense spending, and low interest rates can lighten the burden). However, after the September rate cut, the market actually fell—because Powell emphasized 'no significant easing', directly countering Trump's radical demands.
My observation: The market now resembles a starving wolf hungering for a meal; if interest rate cut expectations cool slightly, Bitcoin could see 400,000 liquidations in a single day. If the Federal Reserve is truly politically hijacked and floods the market with liquidity, the result could be a devaluation of the dollar pushing up import inflation, which in turn forces central banks to raise rates, triggering a more violent asset crash.
3. The 'panic switch' in the crypto market has been controlled by political hands.
Recently, Bitcoin plummeted from a high of $126,000 to below $90,000, ostensibly due to cooling interest rate cut expectations, but it actually exposes the crypto market's excessive dependence on dollar liquidity. A single statement from Trump can cause U.S. stocks to drop by a thousand points in one day, and the same panic in the high-leverage cryptocurrency market will only amplify—don't forget that the U.S. government might still face a 'shutdown' in December; if a debt crisis erupts, the Federal Reserve may not even have time to put out the fire.
My strategy: Don't bet on the direction in the short term, but focus on two signals:
The dollar index falling below 99 (indicating capital flight from U.S. assets), decisively increase positions in Bitcoin;
Federal Reserve officials turn hawkish (for example, hinting at prioritizing anti-inflation), immediately reduce risk exposure.
After all, when political players start to manipulate economic laws, surviving becomes more important than making money.
4. The long-term survival rule: Treat volatility as a friend.
Trump's radical policies are accelerating global 'de-dollarization', with multiple central banks frantically buying gold and promoting local currency settlements. In this context, Bitcoin's narrative may shift from 'speculative asset' to 'dollar alternative', but the process will not be smooth—if the U.S. uses dollar swap quotas as a bargaining chip, an instant liquidity crisis could wipe out leveraged players first.
My bottom line: Position management is crucial. Always keep enough cash, and don't be misled by the 'FOMO sentiment of a rate cut bull market'. History tells us that the outcomes of political gambling often leave ordinary people to foot the bill.
The market always swings between fear and greed, but this time is different: Trump has directly turned the Federal Reserve into a political tool, making the rules a joke. As traders, we must be wary of the short-term storms caused by power's whims, but also not miss the long-term opportunities of order reconstruction. If dollar credibility truly cracks, cryptocurrency might become that beam of light. But remember—survive to see that day first.
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