‘Buckle Up'—Bitcoin And Crypto Brace For A Huge Fed Flip, Predicted To Spark A Price Boom
Bitcoin and crypto have rebounded after a major escalation in the Israel-Iran conflict sent prices spiraling amid fears of a 'doomsday' scenario.
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The bitcoin price has climbed back over $100,000 per bitcoin, helped by U.S. president Donald Trump's shock prediction of 'massive' crypto investment.
Now, as the market digests a Congress game-changer expected to 'unleash' trillions, bitcoin and crypto prices are braced for Federal Reserve chair Jerome Powell's semi-annual testimony before lawmakers—coming after Trump suddenly flipped on firing him.
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U.S. Federal Reserve chair Jerome Powell has committed to keep interest rates on hold, with some ... More predicting the bitcoin price and wider crypto market could soar once when it begins cutting.
'Aside from any geopolitical updates, today's key event will be Fed chair Jerome Powell's testimony in Washington,' David Morrison, senior market analyst at Trade Nation, said in emailed comments.
Trump posted to his Truth Social account over night that the Federal Reserve board should 'activate," forcing Powell, who he's branded 'too late,' to cut rates by "at least two to three points," and "save the U.S. more than $800 billion per year.'
'I hope Congress really works this very dumb, hardheaded person, over,' Trump added.
The Fed kept interest rates on hold again last week after kicking of a reduction cycle in September that's been put on pause due to fears Trump's global trade tariffs could see a return of inflation.
'All eyes are on the Federal Reserve chair Jerome's testimony before Congress and Friday's PCE inflation print to determine how close the Fed may be to its long-awaited policy pivot,' Ray Youssef , the chief executive of NoOnes, said via email.
'The most bullish scenario would be confirmation of a Fed dovish policy pivot or a major de-escalation in global trade and geopolitical tensions, either of which could spark renewed interest in risk assets and push bitcoin towards retesting its all-time high.'
Expectations around an eventual Fed interest rate cut have been built up by crypto traders and influencers on social media.
'Buckle up,' one crypto trader posted to X alongside a hopeful prediction that 'trillions' will flow in to crypto once the Fed eventually cuts rates—now priced at a 22% chance in July, up from just 10% last week, according to the CME FedWatch tracker.
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The bitcoin price has rocketed over the last year, with some predicting the bitcoin price will climb ... More even higher once the Federal Reserve cuts interest rates.
Two Fed officials, Federal Reserve vice chair for supervision Michelle Bowman and Federal Reserve Bank of Chicago president Austan Goolsbee, have this week joined Fed governor Christopher Waller admitting it may be time to lower interest rates.
'It is time to consider adjusting the policy rate,' Bowman told a gathering held in Prague, it was reported by Reuters, while Goolsbee reportedly said that Trump's trade tariffs have 'not been what people feared."
Powell has pointed to the expected increase in inflation as a result of Trump's so-called Liberation Day of global trade tariffs as reason to take a 'wait-and-see' approach to adjusting interest rates.
Last week, Waller has said he doesn't expect Trump's tariffs to drive inflation higher so policymakers should be looking to lower interest rates as early as July.
'If you're starting to worry about the downside risk [to the] labor market, move now, don't wait,' Waller told CNBC.
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Politico
21 minutes ago
- Politico
Trump plans to tout Iran strikes at NATO summit focused on European defense spending
THE HAGUE, Netherlands — The singular narrative of this NATO summit is European allies investing more in their own defense. But Donald Trump isn't interested in following anyone else's script. At his press conference here on Wednesday, the president intends to talk as much about the U.S. strikes on Iran and its fragile ceasefire with Israel — for which he credits himself — as he does the historic defense spending pledge NATO members agreed to this week largely at his behest, according to a White House official granted anonymity to discuss the president's plans. And as Trump made clear in his comments on Tuesday, his view of the transatlantic alliance is a departure from predecessors who long described Article V as sacrosanct. When asked aboard Air Force One if he was committed to that bedrock principle of the NATO charter, under which an attack on any member nation is deemed an attack on all, Trump hedged. 'Depends on your definition,' Trump said. 'There's numerous definitions of Article V.' A second White House official, also granted anonymity to discuss the president's thoughts about NATO, said the president was referring to the open-ended nature of Article V's potential application and how circumstances would likely dictate what allies would be compelled to do to defend a member country in the event of an attack. Trump has said previously he might only come to the defense of nations that are meeting NATO's agreed upon spending benchmarks. When pressed on the matterTuesday, he said he was 'committed to being their friend. You know I've become friends with many of those leaders. And I'm committed to helping them.' 'I'm committed to saving lives. I'm committed to life and safety,' Trump added, declining to get specific. Trump was all smiles as he posed for a 'family photo' alongside the other leaders Tuesday evening at a welcome dinner hosted by the Dutch royal family at the Paleis Huis ten Bosch. The group included Ukrainian President Volodymyr Zelenskyy, who Trump is expected to meet with on Wednesday in between the main NATO plenary session and his closing press conference. Trump's comments came just hours after Secretary General Mark Rutte chided those who still question America's commitment to the longstanding defense pact under Trump. He urged Europeans to 'stop worrying so much' given all that the U.S. is contributing to continental defenses. 'They are there, they are with us,' Rutte said. But even at this summit engineered to appease Trump by cementing a spending pledge for Europe to share more of the burden of its defense, the questions won't go away. 'Europe and the U.S. seem to share this goal of rebalancing the alliance,' said one European official granted anonymity to discuss private conversations among EU officials. 'But with Trump there is always going to be this uncertainty about how much America will really be there for us if and when we need them to be.' Some of the deeper anxiety stems from the Pentagon's ongoing review of its force posture in Europe, which has NATO members nervous that some U.S. forces may be relocated out of Europe in the months ahead or on a timeline that doesn't allow them to boost their own forces. But a lot of the concern relates to the views the president has expressed, including comments Tuesday likening the alliance to a failing company that he helped revive. 'NATO was broke,' Trump said, noting that only 'seven of the 28' countries in the alliance at that time were 'paying their dues.' The alliance agreed in 2014 that all member countries would aim to spend 2 percent of gross domestic product on defense by 2024. While Trump correctly says that it wasn't until after Russia's 2022 invasion of Ukraine that a majority of NATO members were at or above the 2 percent level, the pledge was never binding or required for continued membership in the alliance. Rhetoric aside, Trump has moved into closer alignment with NATO allies overall, largely as a result of Russia's unwillingness to go along with his attempts to broker an end to the war in Ukraine. And the alliance's new commitment that member nations will spend 5 percent of GDP on defense by 2035 marks the fulfillment of a foreign policy priority that Trump has been calling for since 2016. With his efforts to persuade Russian President Vladimir Putin having hit a dead end, Trump has 'reoriented and is no longer so focused on finding a deal with Moscow,' said Ian Bremmer, the president of Eurasia Group, a global risk assessment firm. 'They're now putting a lot more effort into engaging with the Europeans on what the additional defense spend looks like. That's a big shift from just a few months ago when everyone thought Trump was about to go to Moscow.' Trump may not be withdrawing the U.S. from the alliance, as he threatened he might during the 2018 summit in Brussels if allies didn't get serious about defense spending. But he's still causing concern among European leaders because he's not consulting with European partners the way his predecessors did. 'They shouldn't expect him to at this point,' the second White House official said. 'He's going to be decisive and do what he thinks is best for America.' Trump, another European official noted, didn't give European leaders much warning before he authorized last Saturday's B-2 strikes on Iran's nuclear facilities. Although he did leave leaders at the G7 summit in Canada last week with the sense that he was leaning toward such an attack. While he criticized Spain for requesting an exemption from NATO's new defense spending mandate, the president reaffirmed his belief that the U.S. shouldn't have to abide by it either. America spends 3.4 percent of GDP on defense, just shy of the 3.5 percent benchmark countries will have a decade to reach. But Trump's stance has less to do with America's capabilities than with its self interest. As he made clear, he's philosophically opposed to continuing to be responsible for defending Europe. 'I don't think we should pay what everyone else [does]. You know; they're in Europe. We're not,' he said. 'A lot of that money goes to rebuilding their bridges, their roads, so it can take heavy equipment. And you know, we don't have any roads in Europe. We don't have any bridges in Europe.'
Yahoo
23 minutes ago
- Yahoo
Middle East tensions could unleash a 2-part worst-case scenario that hits stocks, Morgan Stanley says
The worst-case scenario for stocks could come out of tensions between Israel and Iran, Morgan Stanley said. The bank said its bear case for stocks was oil prices spiking near the end of the business cycle. Oil prices climbed in the heat of the Israel-Iran conflict, but have cooled after the cease-fire. Tensions in the Middle East could spark a series of dire developments for the stock market, strategists at Morgan Stanley said this week. In a note to clients, the bank pointed to the conflict that's unfolded between Israel, Iran, and the US over the last 12 days, with Israel and Iran agreeing to a cease-fire on Monday. Tensions, though, contributed to a spike in oil prices in the last week. While crude is back down, a big jump higher in oil stemming from any Middle East conflict is something that could raise the risk of a recession and lead to the most pessimistic outcome for stocks, the bank said. "The bear case scenario for equities tied to the recent events in the Middle East would be that oil prices rise significantly, thereby posing a threat to the business cycle," strategists wrote. Morgan Stanley's bear-case scenario has two parts that "materially" raise the risks posed to markets, the note said. Oil prices rise at least 75% on a year-over-year basis. That implies Brent crude trading around or over the $120 per barrel range, strategists said. In order for oil prices to trade that high, it would probably require "sustained" disruption to oil supply in the Strait of Hormuz, they added, a key passage for oil exporters in the Middle East. Crude prices dropped significantly from their highs last year, and have also cooled from their recent spike after Iran's limited retaliatory strike on a US base in Qatar and the subsequent cease-fire with Israel. Brent crude, which rose as much as 14% during the 12 days of the conflict, traded around $66 a barrel on Tuesday. The international benchmark was down 20% from last year's levels. West Texas Intermediate crude, which rose as much as 10%, traded around $66 a barrel, down 18% year-over-year. The oil spike needs to occur late in the business cycle. Oil price spikes that have occurred late in the business cycle have historically led to recessions, according to Morgan Stanley's analysis. To be sure, while Morgan Stanley sees spiraling oil prices as highly negative for markets and the economy, such a scenario isn't analysts' base case. "Through last week, the year-over-year rate of change on crude was negative. Thus, while we're respectful of the risks, there's a long way to go on this basis," strategists wrote. The bank remains positive on stocks overall. While geopolitical events have historically sparked volatility in equities, the S&P 500 rose an average of 9% in the 12 months following major conflicts dating back to 1950, according to Morgan Stanley's analysis. Prior to the cease-fire, other Wall Street forecasters were eyeing the risk of a more dramatic oil price spike and its potential effects on the US economy. On Monday, JPMorgan analysts said they saw oil prices rising as high as $130 a barrel if conflict between Israel and Iran were to disrupt energy production in the Persian Gulf. Torsten Sløk, the chief economist at Apollo Global Management, said he saw rising oil prices contributing to stagflation, a scenario where the economy slows while inflation remains stubbornly high. "In short, higher oil prices exacerbate the ongoing stagflation shock stemming from tariffs and immigration restrictions," Sløk wrote in a June note to clients. Read the original article on Business Insider Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Fox News
23 minutes ago
- Fox News
Evening Edition: Trump Heads To NATO Summit Angry Over Ceasefire Violations
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