The Fed’s Mind Games
Early this morning, the market dipped (as expected), but not for the reasons you might think. Bank of America (BOFA) came out saying publicly that the US is far from a recession and there won’t be rate cuts in 2025. But here’s the kicker—privately, they’re telling their clients to buy 2-year US Treasuries (UST) and short the S&P 500 until the Fed panics. Why? Because they know the Fed might have to step in if things get messy.
Powell’s speaking tonight, and everyone’s nervous. Retail traders are pulling out early to avoid drama, but I think we’ll see a dump-and-pump—Powell doesn’t have enough hawkish ammo to really shake things up.
Gold Rising = Bitcoin Safe?
Gold’s going up. Why? Because the market thinks governments will print more money, inflation will spike again, and stocks will be propped up with cheap cash (not real economic growth).
Now, you might ask: “If gold’s high, won’t it dump like stocks or crypto?” Nope. Gold is a store of value—it doesn’t crash like speculative assets. Bitcoin? Also a store of value. Ethereum? More like tech stocks.
Gold won’t drop below $3,000 for long (if at all). Why? Because global debt is $320 trillion—money has to go somewhere. Gold and Bitcoin are inflation hedges. BlackRock isn’t buying Bitcoin for fun—they see the same thing.
The “Basis Trade” Blow-Up
This is a fancy arbitrage play where traders profit from price gaps between spot and futures markets. But recently, it backfired—liquidity dried up, and the market moved too fast (thanks, Trump’s mouth).
If this keeps happening, the Fed might panic and bail out the system—that’s why BOFA’s betting on a Fed freak-out. A real crisis would mean money fleeing banks, and guess what benefits? Bitcoin.
US vs. China: The Tariff War
Trump’s team wants to isolate China by offering lower tariffs to 70+ countries—if they cut ties with China. No Chinese goods, no Chinese companies, no cheap imports.
This could slow global trade, which = less liquidity. And when liquidity drops, markets get shaky.
Retail Sales & the DXY Trick
Tonight, we get US retail sales data. Normally, if sales rise, the DXY (Dollar Index) should rise too—but last week’s numbers were revised down, so the market’s confused.
If the DXY stays weak, Bitcoin won’t react much. But if it drops further? That’s a sign the Fed’s confidence is fake—and money will look for alternatives (like Bitcoin).
Who wins in the US-China war? Doesn’t matter. Who prints money first? That’s the real signal.
Stay sharp.
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