Monetary Policy

Federal Reserve Governor Stephen Miran warns the central bank is fighting the wrong battle by focusing on outdated inflation data, while the real risks are economic cooling and job losses. A potential policy shift towards rate cuts in response to these risks could create a favorable environment for Bitcoin.

The Federal Reserve’s recent 25-basis-point rate cut reveals deeper concerns about the labor market and financial system liquidity, potentially creating favorable conditions for Bitcoin.

Analysts suggest the biggest risk to Bitcoin’s price is not the size of the Fed’s balance sheet, but the significant lag in how monetary policy affects the economy. This delay could create short-term headwinds for crypto before potentially fueling a longer-term rally.

Fed Chair Jerome Powell’s recent speech offered no clues on monetary policy, disappointing markets. By focusing on historical inflation, Powell may have sent a subtle message about economic humility and the Fed’s independence, leaving crypto investors to navigate the resulting uncertainty.