Fed’s Bessent Wants to Lower Interest Rates Amid Market Turmoil
Treasury Secretary Scott Bessent recently claimed that the Trump administration is determined to lower interest rates. But Fed Chairman Jerome Powell’s opposition to the move could be a major obstacle.
Additionally, U.S.-China tariffs may put additional pressure on the cryptocurrency market, reducing the short-term positive impact of lowering rates. Trump’s crypto reserve policy has struggled with Congress’ withdrawal, and the administration may not be prepared to launch a firm fight on the issue.
Can the Fed lower interest rates?
Interest rate is Key monetary policies This has affected the entire U.S. economy. Finance Minister Scott Bessent is determined to disappoint them. president Trump chooses Bessent Shortly after his election victory, Bessent seemed determined to abide by his agenda.
In a recent FOX News interview, Bessent talked about cutting tax rates:
“Interest rates affect credit cards, they will affect auto loans, and the lowest 50% of Americans in the past two years have been oppressed by these high interest rates. We are starting to lower interest rates, which I think is one of the great achievements so far,” Bessent claim In a TV interview.
Generally, risky assets with lower interest rates are optimistic, and Cryptocurrencies fall into this category. Last September, the Federal Reserve Cut 50bps ratewhich proves to be bullish on cryptocurrencies.
Rumors about further tax cuts Boost higher prices, but Fed Chairman Jerome Powell claims Reduce speed It will be the agenda for the foreseeable future.
Powell himself may be the biggest obstacle to lowering interest rates. As Interest rates remain stable in Januarythe crypto market does not view it as a bearish signal. Last month, he Expressed support for the crypto industry In several aspects, Stablecoin The outcome of regulations and termination efforts.
But he also opposed tax cuts, which was ultimately the decision he made.
Regardless of what Trump’s economic policy or what he hopes to pass, the Fed actually determines interest rates. Powell takes the lead claim He will refuse any attempt to drive him out of the office before the end of his term.
It’s a subtle situation; harsh behavior may cause him to leave pro-Cretto’s policy Extreme fear dominates the market.
Tariff fuel market uncertainty
Another complication is Donald Trump’s tariffs Oppose Canada, Mexico and China. These took effect last night, all three countries had revenge.
Usually, lower interest rates give traders an additional advantage when making venture capital. However, geopolitical issues may complicate these regular patterns.
encryption The liquidation is already very highUS-China trade war could lead to liquidity compression. Over 300,000 traders have been liquidated in the past 24 hours and the market may be in a highly speculative phase.
When Trump filed tariffs last month, this caused Using Bitcoin as a peak value for inflation hedging. This factor may relieve the pressure on cryptocurrencies, but it seems like a long shot.
In other words, this could be a bad time to stick to lower interest rates. yesterday, Trump’s crypto reserve plan It is beginning to see a serious driving force for both sides and the industry, which could collapse in Congress.
To achieve this, Trump and Bennister will need to convince Powell or force him to leave. They may not want to commit to this battle When a recession is imminent.
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