President Trump and the Federal Reserve: A Closer Look at Interest Rate Speculations
In recent developments, President Donald Trump expressed his anticipation that the Federal Reserve might soon embark on reducing interest rates. This sentiment emerged following a private meeting with Federal Reserve Chair Jerome Powell.
Federal Reserve Holds Steady: Interest Rates Unchanged
Contrary to President Trump’s expectations, the Federal Reserve made the decision to maintain the status quo regarding interest rates. On Thursday, July 31, the central bank announced that it would keep its benchmark rate steady at 4.25–4.5%. This decision was influenced by the necessity to gather more comprehensive economic data before contemplating any rate cuts.
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Crypto Market Faces Turbulence
The Federal Reserve’s announcement had an immediate ripple effect on the cryptocurrency market. The sector experienced a significant downturn, with its market value plummeting by over $150 billion in a single day. The global crypto market capitalization fell from $3.89 trillion to $3.74 trillion, triggering widespread concern among investors.
Cryptocurrencies Experience Multi-Week Lows
The aftermath of the Federal Reserve’s decision saw Bitcoin (BTC) hitting a three-week low, trading at approximately $114,400. Similarly, Ethereum (ETH) experienced a decline of 4.94%, settling at $3,628. This scenario was reminiscent of past market reactions, such as in April when President Trump announced tariff increases, leading to a significant drop in Bitcoin prices and a market loss nearing $500 billion.
Altcoins Suffer Greater Losses
Altcoins bore the brunt of the market downturn, with XRP experiencing a 7.38% decrease. SPX6900 (SPX), which had recently been the top-performing coin over the past 90 days, saw a sharp decline of 17.44%. These changes underscore the volatile nature of the cryptocurrency market, especially in response to macroeconomic factors.
Future Predictions and Market Sentiment
Looking forward, speculation surrounding Federal Reserve rate cuts continues to stir the crypto community. On Polymarket, a platform dedicated to crypto predictions, traders are betting on a nearly 60% probability of seeing zero to one rate cuts by the end of 2025. This outlook is likely influenced by concerns over rising inflation and potential trade disputes.
As the global cryptocurrency market capitalization has experienced a 3.82% decline, settling at $3.74 trillion since the Federal Reserve’s announcement, the future of digital assets remains uncertain. Market participants are keenly observing how these economic developments will unfold.
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