Trump Criticism Sends Fed Rate Cut Expectations Soaring 300%

This week, Federal Reserve Chairman Jerome Powell completed his congressional hearing, but faced criticism from President Trump, who labeled him a "foolish political figure" and hinted at nominating a new Fed chair earlier than anticipated. The market interpreted this as a signal that monetary policy could become looser, leading to a surge in expectations for three rate cuts this year. Short-term U.S. bond yields declined, the dollar hit a near three-year low, and crypto assets strengthened.

Market participants expressed concerns about the potential compromise of the Fed's independence, fearing that a "shadow chair" could interfere with decision-making processes. This interference could weaken transparency and credibility, exacerbating market volatility.

Bitunix analysts suggested that short-term funds are flowing into crypto assets for hedging purposes, causing a price surge in Bitcoin (BTC). However, they cautioned that political uncertainty and potential changes in Fed personnel could lead to continued volatility.

Analysts recommended focusing on the short-term support level of $102,500 and the resistance level of $110,500 for BTC. They advised taking profits on rallies, setting strict stop-loss orders, and waiting for further clarification on July's policy statements and nomination news.