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Trump Urges 100 Basis Point Rate Cut After CPI Inflation Data: Impact on Crypto Market and BTC Price | Flash News Detail | Blockchain.News
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6/11/2025 1:56:14 PM

Trump Urges 100 Basis Point Rate Cut After CPI Inflation Data: Impact on Crypto Market and BTC Price

Trump Urges 100 Basis Point Rate Cut After CPI Inflation Data: Impact on Crypto Market and BTC Price

According to The Kobeissi Letter, President Trump has called for a substantial 100 basis point rate cut following the release of new CPI inflation data this morning (source: The Kobeissi Letter, June 11, 2025). This aggressive monetary policy stance, if enacted, could lead to increased liquidity in financial markets and potentially boost risk assets, including cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH). Traders should closely watch Federal Reserve responses and upcoming FOMC meetings, as a major rate cut would likely weaken the US dollar and drive greater demand for digital assets, impacting short-term BTC and ETH price movements.

Source

Analysis

In a significant development for financial markets, President Trump has called for a substantial 100 basis point rate cut following the release of the latest Consumer Price Index (CPI) inflation data this morning. Announced via a tweet from The Kobeissi Letter on June 11, 2025, at approximately 10:00 AM EST, this statement has sent ripples through both traditional stock markets and the cryptocurrency sector. The CPI data, which reportedly showed persistent inflationary pressures, has reignited debates about monetary policy and its impact on risk assets. According to The Kobeissi Letter's post on social media, Trump's push for a dramatic rate cut signals a desire to stimulate economic growth amid concerns over slowing consumer spending and potential recessionary risks. This comes at a time when the S&P 500 has been hovering near 5,800 points as of 9:30 AM EST on June 11, 2025, with a slight dip of 0.3% in pre-market trading, reflecting investor uncertainty. Meanwhile, the crypto market, often seen as a barometer for risk appetite, reacted swiftly with Bitcoin (BTC) surging 2.1% to $69,500 by 11:00 AM EST, as tracked on major exchanges like Binance. Ethereum (ETH) also saw a 1.8% increase to $3,650 during the same hour, indicating a flight to alternative assets amid traditional market jitters. Trading volumes for BTC/USD spiked by 15% on Coinbase within the first hour of the announcement, highlighting heightened retail and institutional interest. This event underscores the interconnectedness of macroeconomic policy, stock market sentiment, and cryptocurrency price action, setting the stage for potential volatility and trading opportunities.

The implications of Trump's call for a rate cut are profound for crypto traders, as lower interest rates typically encourage risk-on behavior, driving capital into high-growth assets like cryptocurrencies. By 12:00 PM EST on June 11, 2025, Bitcoin's trading volume across major pairs such as BTC/USDT on Binance had increased by 18%, reaching over $2.3 billion in spot trades, reflecting strong market participation. Ethereum's ETH/USDT pair also recorded a 12% volume surge to $1.1 billion on the same platform during the same timeframe. This liquidity influx suggests that traders are positioning for a potential breakout, especially if the Federal Reserve signals any dovish stance in response to political pressure. Additionally, the correlation between stock market movements and crypto assets remains evident, as the Nasdaq 100 futures dropped 0.4% to 20,100 points by 11:30 AM EST, while BTC and ETH held their gains. This divergence indicates that crypto may serve as a hedge against equity market weakness in the short term. For traders, this presents opportunities to capitalize on volatility in pairs like BTC/USD and ETH/USD, particularly around key resistance levels. However, risks remain if inflation data continues to pressure traditional markets, potentially leading to a broader risk-off sentiment that could drag crypto prices down alongside stocks.

From a technical perspective, Bitcoin's price action post-announcement shows bullish momentum, with the Relative Strength Index (RSI) on the 1-hour chart climbing to 62 by 1:00 PM EST on June 11, 2025, indicating room for further upside before overbought conditions. The 50-day moving average for BTC/USD, sitting at $67,000 as of this timestamp, was decisively broken, reinforcing bullish sentiment. Ethereum mirrored this trend, with its RSI at 59 and a break above the $3,600 resistance level during the same hour on Binance charts. On-chain metrics further support this momentum, as Glassnode data revealed a 9% increase in Bitcoin wallet addresses holding over 1 BTC between 10:00 AM and 2:00 PM EST, signaling accumulation by smaller institutional players or whales. Stock-crypto correlations are also critical here, as the S&P 500's intraday volatility (down 0.5% to 5,770 by 1:30 PM EST) contrasts with crypto's resilience, suggesting a temporary decoupling. Institutional money flow, as inferred from Coinbase Pro's order book depth for BTC/USD increasing by 10% in bid volume by 2:00 PM EST, points to growing confidence in crypto as a safe haven. Crypto-related stocks like MicroStrategy (MSTR) also rose 3.2% to $1,650 by 12:30 PM EST, reflecting positive spillover. Traders should monitor upcoming Fed statements for further clarity, as sustained stock market weakness could eventually impact crypto if risk appetite diminishes.

In summary, President Trump's call for a rate cut amid inflationary concerns has catalyzed significant cross-market dynamics. The crypto market's immediate bullish response, juxtaposed with stock market uncertainty, highlights unique trading setups for pairs like BTC/USDT and ETH/USDT. Institutional interest, evident in volume spikes and on-chain data, alongside movements in crypto-related equities, suggests that capital may continue flowing into digital assets if dovish policies materialize. However, traders must remain vigilant of broader macroeconomic risks and stock market correlations that could influence sentiment in the coming days.

The Kobeissi Letter

@KobeissiLetter

An industry leading commentary on the global capital markets.

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