2025-12-26 18:24:38

The battle for the new Federal Reserve Chair candidate has entered a heated stage, and the underlying liquidity upheaval behind this power transition is directly threatening the trend of crypto assets.

As a key variable in global asset pricing, the policy inclination of the Federal Reserve Chair candidates has become the market's focus. Currently, the two main candidates each have their characteristics: one advocates for "cooperative rate cuts," with a nomination probability of around 47%, supported by Wall Street and the Treasury, and relatively sensitive to political pressure; the other emphasizes "Federal Reserve independence," with expectations dropping from 80% to 54%. This data-driven dovish candidate supports easing but refuses to blindly compromise.

The situation has become more complicated now. The tough stance of U.S. officials—such as outright rejection of interest rates above 1% and demands for the new chair to report directly to the White House—are impacting the Fed’s century-old tradition of independent operation. This intervention, combined with the Treasury’s intention to establish a "direct reporting line," is causing the market to reassess the likelihood of rate cuts.

Data shows the outlook is uncertain. Currently, U.S. CPI has fallen to a four-year low of 2.7%, theoretically providing room for aggressive rate cuts. However, persistent employment data improvements have become a hindrance. According to CME futures data, the probability of a rate cut in January 2026 is only 15.5%, rising to 42.2% by March. This volatility reflects extreme market uncertainty about policy prospects.

For the crypto market, this is far more than political drama. If aggressive rate cuts are ultimately implemented, global liquidity expansion will directly benefit high-risk assets like Bitcoin and Ethereum. Coupled with the current friendly regulatory attitude, the inflow of funds is quite possible. Conversely, if the Fed’s independence is severely undermined, leading to rising long-term interest rates, risk asset sentiment could be seriously suppressed.

The core question is: will the market ultimately favor the "easy-to-please" candidate or stick to the "independent" option? This choice could directly determine the liquidity rhythm of the crypto market in 2026.

BTC1,32%

ETH0,87%

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MetaEggplant

· 2025-12-29 17:44

The expectation of rate cuts is swinging, and so is our wallet. This is the crypto market. --- Honestly, the Federal Reserve's independence being publicly undermined feels like watching Game of Thrones. In the end, we are the ones who get hurt. --- So basically, it's a gamble on whether that candidate can withstand political pressure. If you pick the wrong coin, the price could be cut in half. --- The key word for liquidity in 2026 is "uncertainty." This round of market movement is probably going to be messed up by Washington. --- Jumping from 15.5% to 42.2%, the market's volatility is truly incredible. Even Bitcoin seems to be waiting for an answer. --- Once the easing expectations collapse, just wait for the cash-out wave. Where the funds will flow, nobody knows.

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MetaverseMortgage

· 2025-12-29 06:40

Honestly, this move is a bit outrageous, directly intervening in the Fed's century-old tradition? We just have to sit back and watch the show. --- The expectation of rate cuts keeps fluctuating, being able to hold steady without selling is quite an achievement. --- 47% vs 54%, it feels like a political gamble, and the crypto world has become a backdrop. --- If the more agreeable one takes the stage, we might really take off. By the way, is this probability still decreasing? --- Liquidity is the key, who the chairman is is secondary; that's the logic. --- CPI is so low but no rate cuts, it's really hard to move the market. Looks like political pressure is the only way. --- I bet there will be another round of turbulence before the end of this year. Let's talk about 2026 later; for now, stockpile crypto. --- I'm just worried the Fed might really be sidelined, and that would spell disaster for risk assets. Just thinking about it gives me chills. --- The White House demands a report? That's setting a pretty unpleasant precedent. --- Actually, there are only two scenarios: bull or bear, there's not much else to choose from.

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FlashLoanKing

· 2025-12-29 00:06

To be honest, this game is too big for ordinary people to see through. However, during the period when the rate cut expectation dropped from 80% to 54%, I truly sensed a change... If the Federal Reserve is really compromised by political pressure and loses its independence, retail investors like us will be in trouble.

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ShadowStaker

· 2025-12-26 18:54

honestly the fed chair drama is just noise if you ask me... what actually matters is whether we get that liquidity injection or not. CPI at 2.7% is chef's kiss for rate cuts, but employment data keeps playing spoiler. 15.5% to 42.2% swing in 2 months? that's not signal, that's pure chaos.

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wrekt_but_learning

· 2025-12-26 18:53

Everyone is watching who the Fed Chair will choose, but I'm more concerned about whether Bitcoin will soar or fall... Can liquidity really determine everything?

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YieldWhisperer

· 2025-12-26 18:32

Uh... if we really choose the "easy to talk to" one, can BTC skyrocket? When liquidity loosens, all risk assets will have to dance along, right?

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