$LRC
The Federal Reserve is in turmoil! Powell's hard push for interest rate cuts faces backlash, is the cryptocurrency sector about to take a hit?
Under pressure, Powell forcibly cut interest rates by 25 basis points, leading to a direct split within the Federal Reserve into three factions: some want to stabilize rates, some call for larger cuts, and a group of non-voting members threw out “silent dissent votes” in defiance.
Out of 12 regional Federal Reserve banks, only 4 support the rate cut, while 6 policymakers insist on maintaining rates in the 3.75-4% range; the former Philadelphia Fed president even bluntly stated that this rate cut is a mistake! Powell insists the differences are normal, but anyone with clear eyes can see that even he, with his seniority, can't hold the situation together; the new chair next year will likely face a hellish consensus dilemma.
More critically, this round of infighting within the Federal Reserve significantly impacts the cryptocurrency sector. In theory, rate cuts benefit risk assets, but internal divisions mean that subsequent policies are full of uncertainty—markets cannot decipher whether the Federal Reserve will continue to inject liquidity or suddenly shift direction, and cryptocurrency prices will likely experience severe fluctuations based on news.
Last week, initial jobless claims surged by 44,000, combined with layoffs at Pepsi and HP, further providing ammunition to the rate cut advocates. Short-term liquidity expectations may warm up and provide some support. However, against the backdrop of unmet inflation targets and indecisive policies, whether this support can withstand selling pressure remains uncertain.
What do you think? Is this round of infighting within the Federal Reserve a short-term boon for the cryptocurrency sector, or is it the calm before the storm? Share your views in the comments!