Fed Chair Jerome Powell’s post-meeting remarks highlighted rising stagflation risks — slow economic growth and persistent inflation — partly due to Trump’s tariff policies. Source: The Kobeissi Letter“It appears the Fed sees both higher inflation and higher unemployment ahead,” The Kobeissi Letter said on X, adding: “They are holding off on cutting rates to see which part of their dual mandate spikes further.Uncertainty remains.”This environment elevates Bitcoin’s status as a store of value, often likened to “digital gold.” Investors, wary of inflationary pressures eroding fiat currencies, are turning to Bitcoin as a hedge, much like during the 2020 monetary easing period when crypto rallied. “The Fed is worried about stagflation,” Zach Pandl, head of research at Grayscale, said in a May 7 post on X after the Fed’s decision and press conference.“We think that outcome would be good for Bitcoin.”Anticipation of US-UK trade deal fuels market optimismThe US President Donald Trump administration has signaled a pro-crypto stance, and reports suggest a trade agreement with the UK could be announced soon.
The New York Times reported that the country would be the UK, citing three people familiar with the matter.🇺🇸 JUST IN: President Trump announces a "major trade deal" news conference scheduled for tomorrow at 10:00 AM in the Oval Office with "a big, and highly respected country.” pic.twitter.com/irsood0JRZ— Cointelegraph (@Cointelegraph) May 8, 2025A US-UK deal would signal the de-escalation of global trade tensions, boosting risk appetite across markets, including cryptocurrencies. Related: Falling DXY part of US financial system’s ‘long-term transition’ — Will Bitcoin continue to shine?
Following this announcement, Bitcoin rose as much as 4%, extending its weeklong rally as macroeconomic conditions improve. Other major cryptocurrencies also followed in Bitcoin’s footsteps, signaling a shift in market sentiment with the Crypto Fear & Greed Index returning to “greed” territory.
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Author / Journalist: Cointelegraph by Nancy Lubale
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