Tomorrow it will be that time again: the Federal Reserve (FED) will take an interest rate decision. This moment is always exciting, because an interest rate reduction can have a major impact on both crypto and traditional financial markets. What can we expect tomorrow?
Is an interest reduction probably?
Since the Pandemie, the Federal Reserve consciously has been high on interest, and that is no coincidence. The goal? Inflation into the head. But of course that has a price. The higher the interest, the more expensive it becomes to borrow and invest money, which can slowly slow economic growth. Especially risky assets, such as crypto and tech shares, are more bothered by this.
Nevertheless, we saw an interesting turn earlier this month, inflation in the US fell stronger than expected. Inflation amounted to 2.8% in February, lower than the expected 2.9% and the 3% of January. Where it was first thought that interest rates would take months to come, that possibility is now suddenly on the table. But whether the Fed has already made the decision tomorrow? That remains the big question.
Trump plays game with the Fed
According to analyst Anthony Pompliano, Donald Trump plays a deliberate game with the American central bank. According to the expert, Trump wants nothing more than interest rates. The reason? The towering US national debt and the gigantic interest charges that come with it. But despite his position as president, the president has no direct influence on the Federal Reserve, which operates independently.
To get his way, Pompliano suspects that Trump consciously creates unrest in the markets to put pressure on the Fed. By reducing the markets, the central bank would almost be forced to lower interest rates. This would make refinancing the national debt easier and at the same time stimulate economic growth.
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Source: https://newsbit.nl/morgen-spannend-rentebesluit-van-de-fed-dit-staat-er-op-het-spel-voor-crypto/
