Trump once again pressures the Federal Reserve: When the market rises, cut interest rates. What does this mean for cryptocurrencies?

U.S. President Trump recently stated that the Federal Reserve should lower interest rates when the market is rising. This statement once again highlights Trump’s clear stance on Fed policy and has sparked a new round of speculation about future interest rate trends. As an important participant in the cryptocurrency market, such policy signals often directly impact asset pricing and market sentiment.

Trump’s Policy Logic

Core Viewpoint

Trump’s statement reflects a clear policy preference: during periods of economic growth and rising markets, the Federal Reserve should proactively lower interest rates. This differs significantly from traditional central bank policy frameworks.

Underlying Logic

• Economic Stimulus Orientation: Rate cuts are generally seen as economic stimulus tools used to counter recession or slow growth
• Market-Friendly Policy: Rate cuts tend to boost asset prices, benefiting risk assets like stocks and cryptocurrencies
• Political Considerations: Trump has historically favored looser financial conditions, believing this can support economic growth and employment

What This Means for the Market

Potential Tension with the Federal Reserve

The Fed’s traditional stance is independent decision-making, unaffected by political pressure. Trump’s remarks are effectively putting pressure on the Fed to adopt a looser policy. This tension could lead to several outcomes:

• The Fed may face political pressure
• Market expectations for future interest rate paths may adjust
• Looser expectations could support the performance of risk assets

Relevance to the Cryptocurrency Market

Historically, interest rate expectations have shown a strong correlation with cryptocurrency price movements:

• Expectations of rate cuts generally benefit risk assets like Bitcoin (liquidity easing, funds seeking returns flow into risk assets)
• Expectations of rate hikes tend to suppress cryptocurrency prices (U.S. dollar appreciation, decreased attractiveness of risk assets)

Follow-up Focus

Trump’s statement is not an isolated event but reflects his ongoing attitude toward economic policy. Future attention should be paid to:

• The Fed’s actual response to such political pressure
• Market re-pricing of the probability of rate cuts
• The actual impact of related policy signals on liquidity in the cryptocurrency market

Summary

Trump’s viewpoint indicates a clear preference for looser financial conditions, creating interesting tension with the Fed’s independent decision-making framework. For the cryptocurrency market, expectations of easing policies are generally positive, but actual implementation depends on the Fed’s real response. These macro policy signals warrant ongoing attention, as they often influence the performance of the entire risk asset class.