The Fed's Shift in Tone: Break in Rate Cut Expectations, Rate Hikes May Resume

According to "Fed Whisperer" Nick Timiraos, the Federal Reserve's internal discussions have shifted focus from "when to cut rates" to "whether to resume rate hikes." Several officials from the Dallas Fed, Minneapolis Fed, and others no longer want to signal "more likely rate cuts next," but instead emphasize that "the next move could be either a rate cut or a rate hike." Jerome Powell, who is soon to step down, has also repeatedly mentioned a "neutral stance," indicating that the Fed is pulling back from its previous easing bias. If inflation worsens again, a restart of rate hikes is not out of the question.

A Dangerous Signal for Global Markets

Over the past year, the supporting logic for risk assets like U.S. stocks, gold, and cryptocurrencies has essentially been "the U.S. will eventually cut rates and loosen policy." Once this expectation loosens:

· U.S. stocks come under pressure
· Gold experiences increased volatility at high levels
· The crypto market faces liquidity shocks

The crypto space is especially sensitive: what truly determines Bitcoin's direction is not ETFs or halving, but global liquidity. Maintaining high interest rates or even raising them increases the cost of capital, making risk assets inevitably suffer.

On the other hand: Bitcoin's narrative of anti-inflation may return

The Fed discussing "resuming rate hikes" precisely indicates that concerns about persistent inflation and declining monetary purchasing power still exist. Once the market begins to worry again about fiat currency devaluation, Bitcoin's narrative as an "inflation hedge" could be reignited.

Conclusion: Focus on a Single Core Point

Do not be distracted by short-term rises and falls. The future direction of the crypto market depends entirely on whether the U.S. will resume easing or continue to maintain high interest rates (or even hike). This will determine the overall market trend. #Gate广场五月交易分享