According to The Kobeissi Letter, President Trump has publicly stated that the Federal Reserve should cut interest rates now and be prepared to raise them again if inflation rises (source: The Kobeissi Letter, June 6, 2025). For crypto traders, this flexible interest rate strategy could introduce increased volatility in both traditional and digital asset markets. Lower rates may spur short-term bullish momentum for Bitcoin and altcoins as liquidity increases, but any rapid reversal due to rising inflation could trigger sharp corrections. Traders should monitor Fed policy shifts closely, as these decisions directly influence dollar strength and crypto capital flows.

According to @markets, US deficit spending has been supporting elevated yields for over 12 months, directly impacting the 10-year Treasury yield. The divergence between the 10-year yield and the S&P 500 increased noticeably ahead of the trade war, as cited by @markets. Alongside the unwinding of the basis trade, interest rates remain approximately 90 basis points higher than before the widely discussed 'Fed pivot' (source: @markets). For crypto traders, this persistent rate elevation signals tighter liquidity conditions and increased volatility, as digital assets often react to broader risk sentiment shifts stemming from traditional markets.