Clarity Act falls short in Senate, 49

Clarity Act falls short in Senate, 49–50, stalling crypto regulation

• CRCL
• BTC-USD

In this episode, Scott Melker discusses the Clarity Act’s failure to advance in the Senate, the Fed’s expected interest rate hike, and Circle’s (CRCL) launch of its Arc blockchain.

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the FOMC decision. I chose this article because it really gets to the heart of this. Trump wants lower rates, his new Fed chairman is poised to raise them.

This announcement comes at 2:00 p.m. and markets are strongly expecting a quarter point rate hike, which would be the first increase since 2023. Markets pricing this at like 93% right now.

I mean, Trump appointed Kevin Warsh expecting lower rates. And now Warsh has to face that pressure on one side, but the actual market and doing the right thing pressure probably on the other side, and all of that could hurt his credibility here.

Is the Fed independent and will he hike rates because that’s what the data says? Or is Kevin Warsh, in fact, a sock puppet who was put in position to get rates down on behalf of of Donald Trump.

It’s important to remember that he does not decide this on his own. There is a committee and three of them already wanted hikes at the last meeting. It will only take seven of them this meeting to get hikes even if he decides that he wants to keep rates steady.

But of course, that level of dissent in the ranks would probably rattle markets which hate uncertainty.

Now, people always are asking, what does this all mean for Bitcoin?

First of all, when rates go up, people generally view it as a risk to risk assets because liquidity tightens, which by the way, the bond market is already doing for them anyways, which is why we talk about fiscal dominance.

But short-term is bad for risk assets.

But there is a world where a credible rate hike, credible rate hike, without saying there’s going to be a ton of hikes or a new cycle, if they if he gives an indication there might just be one hike and it could help manage inflation and inflation’s temporary because of diesel and gas prices, that kind of thing.

That could actually calm the longer-term yields that Beson is so concerned about, and that could eventually create room for cuts.

If we get an indication that we’re going into a hiking cycle, I would say that all bets uh are are off here.

So, it’s going to be really interesting to see what he does. Uh, Besson wants one thing, Trump wants one thing, the market wants one thing, they’re pricing it in, and it could get very, very strange.

I mean, a hike could be painful now, but it could actually be stabilizing later, and a hold on rates could feel bullish uh, while making the long-term credibility problem worse.

I mean, we’ve seen these things before where the market does what you think it should do based on the decision and then goes back entirely the opposite way after the news hits.

Crazy town. It’s going to be interesting to see what happens and how markets react. We do know that Warsh is going to give very little indication of what’s coming into the future, play this uh very close to the chests and refuse to give forward guidance so the market may not get uh the narrative that it wants.

Source: finance.yahoo.com