As if the blasting of a speculative bubble in Memecoins was not enough to send crypto markets tumbling in recent weeks adds a general risk of mood in traditional financing to the pressure.
Perhaps in a bit of a speculative bubble itself, the largest US stock market average has been in rapid retreat of late, triggered by a series of customs threats from President Trump. Threats no more, 25% taxes against goods from Mexico and Canada came into force today, among additional taxes on Chinese goods.
Falling another 2.6% yesterday and down in the early action Tuesday, Nasdaq today is now below the level it was on before Trump won the November election.
Bad news brings lower rates
“We are ready to bring down interest rates,” the Treasury Scott Bessent said in an interview with Fox News on Tuesday morning.
In fact, the 10-year state school dividend is currently at 4.13% against 4.80% just before the Trump inauguration six weeks ago.
At the short end of the curve, the markets are dramatically reject the expectations of bold -up -rate cuts in 2025. The odds of at least one rate set up by the Fed’s May meeting have risen to 47% against only 26% a week ago, according to the CME FedWatch tool. The chances of two or more tight cuts in the June meeting have sprung to 36% from 15% a week ago.
Crypto DayBook Americas It is referred to potential rate cuts that can help lift depressed crypto prices, although the economy remains far from a return to quantitative easing.
While lower rates may seem like an easy solution, the challenge of balancing inflation, which is currently at 3% years-over-year after four consecutive months of increases. The last time the heading inflation was at or below the FAT’s 2% goal was back in February 2021.
Federal Reserve should navigate a delicate balance – easy rates to help keep the economy out of recession without pushing inflation even higher.
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