Fed Holds Rates Near 4% as Trump Pushes for 1%: What It Means for Bitcoin
Fed rates remain near 4% as Trump pushes for 1%, creating a major policy divide.Lower rates support Bitcoin, but rising inflation and bond yields create risks.Bitcoin traders are watching inflation, Treasury yields, the dollar, and the September 30 PCE report. Bitcoin is facing mixed signals from U.S. interest-rate policy. On September 16, the Federal Reserve raised interest rates by 0.25 percentage points to 3.75%-4%. At the same time, President Donald Trump has called for interest rates to fall to 1% or lower. That creates a large gap between Trump‘s preferred rate and the Fed’s current rate. Bitcoin traders are watching whether rates eventually fall or remain high because of inflation. Trump Wants Much Lower Interest Rates Trump again called for much lower interest rates after the Feds decision. He said the U.S. has strong credit, investment is growing, and lower rates would help the economy and trade. Cutting rates from 3.75%-4% to 1% would represent a reduction of about 275-300 basis points. For Bitcoin, lower rates are generally positive because cheaper borrowing encourages investors to take more risk. Lower U.S. interest rates also reduce the returns available from dollar-denominated investments, putting downward pressure on the dollar. These conditions have historically supported assets such as Bitcoin









