Fed Confidence Plummets to 37% as Powell Prepares Rate Cuts
Only 37% of Americans trust Fed Chair Jerome Powell to manage the economy, marking near record-low Fed confidence. Gallup data shows Powell’s approval rating has fallen from 58% in 2020 to its second-worst level in two decades, matching a low not seen since Janet Yellen’s term in 2014. At the Jackson Hole symposium, Powell hinted at upcoming interest rate cuts to support a cooling labor market, igniting market volatility: the dollar weakened, bonds rallied and stocks rebounded.
Political pressure on the Federal Reserve has intensified. Former President Trump publicly attacked board member Lisa Cook and installed allies like Stephen Miran, raising concerns over central bank independence. Bond markets are flashing warning signs, with long-term Treasurys underperforming short-term debt, suggesting investors expect politically driven rate cuts rather than data-driven policy.
This erosion of Fed confidence and looming rate cuts could fuel risk-asset appetite, but increased uncertainty may also trigger volatility. Traders should monitor inflation data and job reports closely to gauge the timing and impact of Fed moves on market stability and crypto trading opportunities.
Bullish
Powell’s hints at imminent interest rate cuts and weakening Fed confidence tend to boost liquidity and risk-asset demand, including cryptocurrencies. Lower borrowing costs often spur speculative trading and enhance crypto market bullish momentum. Although political interference raises long-term uncertainty and potential volatility, the immediate expectation of rate cuts is likely to drive short-term gains in risk assets. Traders should prepare for increased volatility but can expect an overall bullish environment as liquidity conditions ease.