Trump and the pressing rate cut

[Bluedrem]

I don't think so because we didn't have any unusual rises prior to this to be considered a reaction to this expectation. Not to mention that rate cut itself has absolutely no effect on bitcoin price, the effects of it on the economy could have an effect on bitcoin price after a while. Considering how US economy is getting worse for the average American, I doubt any positive effect rate cut may have will have any effect on bitcoin.

Another problem is that we can no longer trust the states released officially because most of them are fake. We all know all governments fake their stats to look better, but at this point Trump is getting more ruthless silencing everyone and lying to get his way. For example 2 days ago he banned the official reports on hunger in US and poverty rate, before that he shut down a popular show and banned everyone from saying anything negative about him,...
The censorship is at an all time high in the US which only means a worsening situation economical and otherwise...

This can also explain why there is no major bitcoin price rise these days with price stuck below $120k despite everyone expecting a bull run.

If the tariff on the product increases, then the purchasing power of the people will decrease, as a result, the expenditure of the people to meet the demand will increase, due to which those who had deposited Bitcoin may need to sell them, so the price of Bitcoin will decrease. If we talk about the government-level economy, then if the tariff on foreign products increases, then the government will have to pay extra money, due to which there will be pressure on the economy, it may be necessary to sell Bitcoin to meet the money shortage. And we know that the more Bitcoin is sold, the more its supply in the market will be, and the price will decrease.
And what you said in the second case - if the bank interest rate decreases, there will be no effect on the price of Bitcoin. I don't think this is entirely correct because when a bank pays a depositor a small amount of profit, they will tend to have a fixed income, as a result, the prices of various bonds, shares, etc. will increase, especially in the current period, the prices of all the shares that are centered on Bitcoin will increase, as a result, Bitcoin collectors will be able to buy Bitcoin again with that money by earning additional profits. Due to this, the price of Bitcoin will increase. Yes, in the current unstable situation, nothing can be said with 100% certainty about the fate of Bitcoin, but it can be said that if the bank interest rate decreases, it will have a slight effect on the price of Bitcoin.

[pooya87]

If we talk about the government-level economy, then if the tariff on foreign products increases, then the government will have to pay extra money,

The government actually earns more money because they are the ones that receive the extra tariffs. In fact this is why Trump started this tariff war, to increase the government income and try to cover a small portion of the budget deficit without having to raise taxes which is going to destabilize the regime more than it already is.

As for the effects on the price you talked about, they are all right. The thing is, there are a lot of factors affecting the bitcoin price and to figure out the combined effects of all of them is impossible since many of them pull the price in different directions.

For example as all the discussions everywhere are about the tariff war, Trump is also waging another economic war that is talked about a lot less. That's a currency war. He is trying to keep dollar strong against other fiat currencies in this war while others try to keep their fiat from tanking (just read the recent news from Canada, EU, etc.).
Bitcoin is another currency that is exchanged against the dollar like other currencies. In that war they are also keeping the dollar exchange rate stronger against bitcoin (prevents bitcoin price rising).
Additionally a stronger dollar means deeper recession in the USA which means less investment in bitcoin and more liquidation, which is another negative reason for lack of bitcoin price rise.

[coyhasmon]

To me, this is the point.
A 25 cut is a policy error, in my humble opinion, but this cut or even a 50 bps one, aren’t going to change anything in the big scheme of events.

I am trying to say is a bit different. Even if it is an error, it is not going to destroy the economy. Do the cut, observe what happens and let's see if it is a mistake or not.

So fillippone, the cut came and it was pretty small. The US is still standing. How long should I wait before declaring that I was right and that a small cut can't nuke the economy?   We don't need to make a big deal about small cuts. It also seems that there will be at least 1 more .25 cut this year.

[fillippone]

To me, this is the point.
A 25 cut is a policy error, in my humble opinion, but this cut or even a 50 bps one, aren’t going to change anything in the big scheme of events.

I am trying to say is a bit different. Even if it is an error, it is not going to destroy the economy. Do the cut, observe what happens and let's see if it is a mistake or not.

So fillippone, the cut came and it was pretty small. The US is still standing. How long should I wait before declaring that I was right and that a small cut can't nuke the economy?   We don't need to make a big deal about small cuts. It also seems that there will be at least 1 more .25 cut this year.

I wasn't worried by the cut per se.
I was worried about this small cut signalling the FED being in total control of the fiscal power. This sends us backward to the pre-Volcker FED, when the Treasury had complete oversight of the FED.
This is by far more dangerous, and Miran is a testimony to that.

[coyhasmon]

I wasn't worried by the cut per se.

Clear, though I wanted to affirm my claims that a small cut is not an issue anyway.

I was worried about this small cut signalling the FED being in total control of the fiscal power. This sends us backward to the pre-Volcker FED, when the Treasury had complete oversight of the FED.
This is by far more dangerous, and Miran is a testimony to that.

Well considering what democrats have done politicizing every institution with their woke disease and even putting a lot of pressure on companies for all sorts of things I think we could say that the FED remaining independent is a small surprise. Still we can't be sure just how independent it remains, as outsiders it is hard to know this for certain. For all we know Powell may not be really that against the rate cute or if someone else were president right now he would be happily voting for a rate cut.

The precedent can be dangerous but it is worthwhile to remember where this started and it sure didn't start with a somewhat random businessman becoming a politician. He is not making it better that is for sure but we should not act like this is completely new territory.  

[fillippone]

The precedent can be dangerous but it is worthwhile to remember where this started and it sure didn't start with a somewhat random businessman becoming a politician. He is not making it better that is for sure but we should not act like this is completely new territory.  

I am not particularly worried by Trump per se.
I would be equally worried if a dem politician would do that as well (and I was actually worried when they did).
Generally speaking I am worried when politicians interfere with markets.
Generally speaking I am worried when politician interfere.

[KiaKia]

The precedent can be dangerous but it is worthwhile to remember where this started and it sure didn't start with a somewhat random businessman becoming a politician. He is not making it better that is for sure but we should not act like this is completely new territory.  

I am not particularly worried by Trump per se.
I would be equally worried if a dem politician would do that as well (and I was actually worried when they did).
Generally speaking I am worried when politicians interfere with markets.
Generally speaking I am worried when politician interfere.

Fillipone, I believe you have a better understanding about the US politics, I am not from the US but something is bothering me and I need your opinion on it.

Are the governors really worrying about the re-election, maybe thats why they will never side Powell?

Is it possible that Trump or Vance will get re elected as president in the future again? If the other party manage to take over power I think that all what Trump and family worked for will shattered.

I heard that someone from Trump family bought EA games and he is a Saudi native , what type of power struggle are they trying to gain here? I don't understand it.

[coyhasmon]

Are the governors really worrying about the re-election, maybe thats why they will never side Powell?

Of course they do. First and foremost they serve their own financial interest, secondary the interests of the country and public. It is very rare to see an individual in these positions or in politics that puts the public's interests above their own.

Is it possible that Trump or Vance will get re elected as president in the future again? If the other party manage to take over power I think that all what Trump and family worked for will shattered.

Trump no, Vance yes. Even if they could get around the mandate limit for Trump he is very old. He should not run again.

I heard that someone from Trump family bought EA games and he is a Saudi native , what type of power struggle are they trying to gain here? I don't understand it.

This is not related to Trump.

I am not particularly worried by Trump per se.
I would be equally worried if a dem politician would do that as well (and I was actually worried when they did).

Well that is the problem of the Dems. They do this sort of crap and then when the other side does it they shriek left and right. If they do it there is a 100 percent chance that the other side does it. If they don't do it, the other side may not do it but it is not a guarantee. Like I said if they didn't want interference they should not have interfered, now it is too late and too hypocritical for their side to complain.

Generally speaking I am worried when politicians interfere with markets.
Generally speaking I am worried when politician interfere.

There is a risk but you have to understand that FED Governors and pretty much most federally appointed employee of the high ranks are also politicians in a way. You don't get these positions without friends, connections, power, kickbacks. The system is broken that is why they often act differently as their reelection time nears. If it worked they would act consistently regardless of reelection time.


Anyway, the markets are now betting with almost near certainty on another .25 cut in October. Thoughts?

[coyhasmon]

Can we address this topic again? I think it would be good.

Anyway, the markets are now betting with almost near certainty on another .25 cut in October. Thoughts?

This happened. Now I'm a maybe on the December rate cut, but it is nice to hear that quantitative tightening is about to stop. Thoughts?

[livingfree]

Can we address this topic again? I think it would be good.

It is timely and Trump had just a meeting with president XI Jinping. And as he's said, Xi is another tough negotiator then.

Rare Earth metals will be cut into 10% tariff and I guess they were 100%-120% in tariffs before.

Anyway, the markets are now betting with almost near certainty on another .25 cut in October. Thoughts?

This happened. Now I'm a maybe on the December rate cut, but it is nice to hear that quantitative tightening is about to stop. Thoughts?

It's expected that the recent cut rate would have given that price bump to Bitcoin but it didn't.

And almost all markets are down again, maybe time to accumulate some again at this moment before they recover.

[Swordsoffreedom]

This happened. Now I'm a maybe on the December rate cut, but it is nice to hear that quantitative tightening is about to stop. Thoughts?

Whether the Fed cuts rates further will depend on economic data in October and November. So it is still too early to predict at this point, we need to wait for more data to be able to make more accurate predictions.

But the decision to stop quantitative tightening on December 1 is actually good news and very welcome because this will help more money flow into the economy and from there the financial markets will be better. This is something that many people overlook and most just focus on interest rates but they don't know that the Fed stopping QT is a positive signal for the economy.

[fillippone]

This happened. Now I'm a maybe on the December rate cut, but it is nice to hear that quantitative tightening is about to stop. Thoughts?

Whether the Fed cuts rates further will depend on economic data in October and November. So it is still too early to predict at this point, we need to wait for more data to be able to make more accurate predictions.

But the decision to stop quantitative tightening on December 1 is actually good news and very welcome because this will help more money flow into the economy and from there the financial markets will be better. This is something that many people overlook and most just focus on interest rates but they don't know that the Fed stopping QT is a positive signal for the economy.

Bear in mind that ending the QT is not enough to get the market, altroins particularly, back into pumping mode: a QE is actually needed for that, we have seen it on previous cycles where end of QT and start of QE have been separated by a few months.

[coyhasmon]

It's expected that the recent cut rate would have given that price bump to Bitcoin but it didn't.

And almost all markets are down again, maybe time to accumulate some again at this moment before they recover.

It is not that, the thing is that the market already expected the December rate cut but now Powell is giving doubt on that one that is why the market responded negatively. It still could happen but I am not as optimistic for it as I was for this one.

But the decision to stop quantitative tightening on December 1 is actually good news and very welcome because this will help more money flow into the economy and from there the financial markets will be better. This is something that many people overlook and most just focus on interest rates but they don't know that the Fed stopping QT is a positive signal for the economy.

Yeah we've been waiting a long time for QT to end. It is surprising how up everything is like stocks even with QT still in progress.

Bear in mind that ending the QT is not enough to get the market, altroins particularly, back into pumping mode: a QE is actually needed for that, we have seen it on previous cycles where end of QT and start of QE have been separated by a few months.

I agree with you, it will probably need some time but I would also be hesitant to say much because we just don't have data. Switching from QT to QE happened only once or twice before, which is not enough data to conclude it has to happen the same way. Still stopping QT is the first step, small steps matter. QE and low interest rates is when the market will be very bullish. I think Powell's replacement will definitely do that unless something crazy happens in the meantime.

[livingfree]

It's expected that the recent cut rate would have given that price bump to Bitcoin but it didn't.

And almost all markets are down again, maybe time to accumulate some again at this moment before they recover.

It is not that, the thing is that the market already expected the December rate cut but now Powell is giving doubt on that one that is why the market responded negatively. It still could happen but I am not as optimistic for it as I was for this one.

Alright, now I understand it.

So, the push could by the December with the next rate cut and this one hasn't done anything at all to make the markets better.

Well then, we're already on November after a few hours and that's not a lot to wait for to see how the markets will react by that next announcement.

[Swordsoffreedom]

Whether the Fed cuts rates further will depend on economic data in October and November. So it is still too early to predict at this point, we need to wait for more data to be able to make more accurate predictions.

But the decision to stop quantitative tightening on December 1 is actually good news and very welcome because this will help more money flow into the economy and from there the financial markets will be better. This is something that many people overlook and most just focus on interest rates but they don't know that the Fed stopping QT is a positive signal for the economy.

Bear in mind that ending the QT is not enough to get the market, altroins particularly, back into pumping mode: a QE is actually needed for that, we have seen it on previous cycles where end of QT and start of QE have been separated by a few months.

Yes, the Fed stopping QT does not mean they will immediately implement QE and pump money massively into the economy. The end of QT this December merely marks the conclusion of the balance sheet runoff phase and the beginning of a period of balance sheet stabilization, not QE. But if they don't stop QT, the QE phase will be even further away from us, so I think this is a milestone and quite important news for the economy and the markets.

After the end of QT, their focus will shift to stabilization before considering any major economic stimulus (QE).

[coyhasmon]

This thread needs more attention again. Here is the current situation for December.




People have been changing their answer to a Yes recently. It can be see in the graph.

After the end of QT, their focus will shift to stabilization before considering any major economic stimulus (QE).

You don't know that, that is just your opinion.

[Fortify]

Let me first put the question to you: Is Trump right to pressure Jerome Powell to cut the Federal Funds Rate?

Trump! Trump!! Trump!!! This soul looks unspeakable, to be honest. Trump likes to control everything and likes everyone to bend the knee. If you prove too stubborn, you will either be sanctioned, tariffed or blackmailed. It's no news that Jerome Powell is now in the black book of Trump, simply because he refused to cut the interest rate. More pressure has been mounted in recent weeks, which includes verbal harassment, threats of replacement and blackmail. The recent blackmail is the lawsuit threatened regarding the Fed's building renovation fund, something Trump wouldn't have thought of if Powell had done his bidding. Mehnnn, Trump will always be Trump.

Now, I took my time to check the US inflation figure to judge if this pressure is worth it, and honestly, it is not, at least arguably not, except that Trump always wants things done his way, regardless of whether or not it follows due process/economics. If at all, the uncertainty ignited by Trump's tariff war is a good reason to wait for the cut.

Again, from the U.S. Bureau of Labor Statistics, the US core inflation rate looks upward to me, which was rekindled in March 2025. Is this the right time to cut the rate?

Below is the PPI released just yesterday for the month of August. The value was 0.7% higher than the forecast and 0.9% higher than the previous value.

This is nothing to do with what is right or wrong, it is merely about Trump trying to apply pressure on to the central bank which is entirely independent of government - rightfully so. The central bank has a single objective which is to protect the US dollar and general US financial health, regardless of what is going on in government. It is generally left along to do that job, except by weak leaders that look to blame it or strong arm it when things are not going well. If Trump had avoided many of the damaging actions he has taken to the US economy it is likely that the rate would be much lower right now, but because they cannot forecast accurately with the erratic nature of his pronouncements, they have to take a much slower approach to fiscal policy.

[fillippone]

Finally, we are almost there: next week, there will be a FED decision.
The tradfi market has quite unanimous expectations: 87% of the market foresee a cut.
Crypto market is moving in the opposite direction thou.
Last dump before the spring gets decompressed?

[coyhasmon]

Last dump before the spring gets decompressed?

It pumped a bit just these days before the rate cut.

So the rate cut has happened, and we have to consider the outlook for 2026 already. Trump has also stated that the next FED president must be willing to cut rates, that is a precondition for any pick if I understood it. While legally it is hard to force candidates to act how they want, they have the ability to manipulate the choices how they see fit and make agreements in time. They all do this, both parties so it would be incorrect to call Trump out for it. They have several candidates as options but I am not sure yet so I would not say confidently about any person in particular.

Before Powell is out, I think we may see 1 to 2 cuts at most. I don't think that they would refuse to cut at least 1 time unless the data is really bad for inflation. After Powell is gone I expect a more strong policy, possibly even cutting by .5 at once.

[DrBeer]

I am watching the situation unfold with interest: not long ago (or rather, constantly ), Trump accused his “personal mental enemy” Bash of “printing money.”
What we are seeing now:
"The financial markets have already priced in a 0.25% cut in the key rate. Therefore, this decision alone will not drive asset growth. Professional investors are focused on the state of the banking system.
Mark Cabana, a BofA strategist with experience at the Federal Reserve Bank of New York, made a bold prediction: the Fed will announce the launch of a $45 billion monthly Treasury bill purchase program starting in January next year."
Remember: starting in January 2026. $45 billion every month. At the expense of printing new paper.
But: On Wednesday, December 10, 2025, the US Federal Reserve announced the immediate start of short-term government bond purchases. This decision, aimed at managing market liquidity and ensuring control over the target interest rate, will take effect on Friday, December 12, 2025.
It looks like they are scrambling to find some kind of quality solution.
PS It will be interesting to hear the explanation, which will probably be something like, “Biden printed money incorrectly, but then Trump came along and now we are printing the same money, but very correctly”?!