The latest printout of the consumer price index in the USA (CPI), the measure of inflation, was lower than expected at 3.1%, beating the expectations of 3.2%, with a 0.1%decrease in the number of inflation.
According to Matt Men, the Crypto Stratega in 21Shares, data on refrigerated inflation increases the likelihood that the federal reserve will reduce interest rates this year, introducing very necessary liquidity on the markets and sending higher risk assets prices. Mena added:
“The expectations regarding the reduction of the rate have increased in response-to-the-old response to a 31.4% chance of a reduction in May, over 3x compared to last month, while the expectations of three cuts at the end of the year increased by 5x to 32.5%, and four cuts increased rapidly from only 1% to 21%.”
Despite the better than the expected number of inflation, the price of Bitcoin (BTC) has dropped from over USD 84,000 in Daily Open until now about USD 83,000, because traders are struggling with the trade war of US President Donald Trump and macroeconomic uncertainty.
Most market participants believe that the federal reserve will lower interest rates by June 2025. Source: CME group
Related: “Trump Tradcoin” Bitcoin is over – traders change the hope of reducing the Fed rates, expanding global fluidity
Does President Trump break off markets to force foot reductions?
The chairman of the Federal Reserve Jerome Powell said several times that the central bank is not in a hurry to lower interest rates – the view repeated by the governor of the Federal Reserve Christopher Waller.
In February 17 speech At the University of Modern South Wales in Symey, Australia, Waller said that the bank should stop interest rate discounts until the inflation drops.
These comments met with the concern of market analysts who claim that the lack of rate reductions can cause bears and send assets prices.
March 10 Market analyst and investor Anthony Pomplianiano speculated This President Trump deliberately crashed financial markets to force a federal reserve to reduce interest rates.
The US government has about $ 9.2 trillion of debt, which will mature in 2025, unless it is refinanced. Source: Kobeissi letter
According to the Kobeissi letter, the US government must refinance the debt of about $ 9.2 trillion before it reaches maturity in 2025.
Lack of refinancing this debt at lower percentage rates will enhance public debt, which is currently over $ 36 trillion, and will cause interest payments on the debt from the balloon.
For these reasons, President Trump made a percentage rate the highest priority for his administration-at the expense of asset and activity markets.
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