Trump's Policies Spark Market Sell-Off, Recession Odds Rise 40%
1min read President Donald Trump's economic policies have sparked speculation that he is intentionally crashing the market to influence the Federal Reserve's interest rate decisions. This strategy, reminiscent of his first term, involves stoking growth fears to pressure the Fed into lowering interest rates, which could benefit the US economy in the long run.
Trump has publicly advocated for lower interest rates, and when the Fed did not comply, the administration allegedly took measures to crash asset prices. This move is seen as an attempt to force Jerome Powell, the Fed chair, to cut interest rates before the US government needs to refinance $7 trillion in debt over the next six months. The plan appears to be effective, with the 10-year yield plunging and the odds of a May interest rate cut now above 50%.
The crypto and stock market sell-off on March 10 was driven by fears of an impending recession, with analysts upping their odds of a recession this year to 40%. This economic uncertainty has also impacted the crypto market, with the 10-year yield plunging to its lowest level since Trump's election.
Goldman Sachs economists also expressed concern that Trump's trade war could lead to a sharp economic downturn, raising their 12-month recession odds to 20%. They warned that the outlook could worsen if the administration persists with its policies despite deteriorating data.
In other news, Securitize has partnered with RedStone to provide data feeds for its tokenized products, including BlackRock’s USD Institutional Digital Liquidity Fund (BUIDL). This partnership allows Securitize’s funds to be used across various DeFi products, expanding BUIDL’s use cases into money market exchanges and collateralized DeFi platforms.
Cboe bzx, a leading securities exchange, is seeking approval from US regulators to add staking into Fidelity’s Ether (ETH) exchange-traded fund. This move could potentially boost the appeal of Ether ETFs by giving investors access to yields. The Securities and Exchange Commission (SEC) has acknowledged more than a dozen crypto-related ETF filings, indicating a regulatory pivot since President Trump’s inauguration.
