Larger Cryptocurrencies have turned loss overnight, with analysts claiming that Wednesday’s bold decision emphasized President Trump’s growing influence over the central bank and strengthens the long-term bullish case for crypto.
Fed kept the benchmark rate stable with 4.25% as expected, and President Jerome Powell dampened the prospects of cuts in renewed interest rates from September, stressing that the central bank is focused on controlling inflation – not on the state’s borrowing or the cost of home loans that Trump wants.
Powell’s comments shook the crypto market where Bitcoin (BTC) dropped to $ 116,000. XRP, Ether (Eth) and Solana (Sun) also fell and shake geared bets from futures markets.
However, these losses have been turned. From the time of writing, BTC traded for $ 118,400, with XRP and ETH changed hands of $ 0.00314 and $ 3,870, according to Coindesk data. Coindesk 80 index, a wider market meter, hovered near 915 points, an increase of 0.8% over 24 hours.
Jimmy Yang, co-founder of the Orbit Markets, said the overnight stay decision revealed a threat to Fed’s independence.
While the central bank had SATS stable, two decision makers – fed Vice President of Supervision of Supervision of Michelle Bowman and Governor Christopher Waller, both appointed as the board of directors of President Donald Trump – dissented and favored a rate cut.
Trump has repeatedly criticized Powell for keeping interest rates raised and costing the United States’ billions of dollars. Note that both the wallet and Bowman have publicly advocated in for investment cuts in recent weeks.
“There is increasing concern about the Fed’s independence when two of Trump’s appointed voted for a rate cut last night; this should strengthen the case for crypto in the long term,” Yang told Coindesk.
He added that the market, without immediate interest rate in sight, could largely trade to a large extent direction -free and awaiting fresh catalysts – the CPI release in July.
“CPI is likely to rise when tariffs kick into the next few months. Cryptocurrencies may be able to sell with wider risk assets. But if inflation fears persist, crypto may be rebounded as a hedge narrative resurrecting, especially for Bitcoin,” noted Yang.
Greg Magadini, director of derivatives at Amberdata, said that although Fed’s decision was in line with expectations, the concerns about Fed’s independence are dwelling.
“The biggest threatening question this year for the bond market is around fed independence. Wednesday’s decision helped Fed to defend its independence. Still if Powell is fired or begins to reduce rates too soon, I expect hard assets (BTC, especially) to gather significantly. At the same time, inflation and bonds would probably lose significant value,” Magadini noted. “Today, the US credit markets are dependent on fed independence.”
Magadini explained that the bond markets continue to price in long-term inflation, which weakens the case for rapid fire frequency cuts to ultra-low levels, as desired by Trump.
“We’ve seen long -bonding yields rise a lot since Trump’s choice. The 10S30S moved from 15bps to 55bps and 2S10s from 5bps to 45bps.
This means that the bond market continues to the price of long -term inflation, especially considering that “real yields” are historically positive … if inflation remains where it is today, “Magadini said.
