September marks the beginning of a decline in cryptocurrency values, driven by rising concerns regarding the independence of the Federal Reserve.
The Fed's Meeting and Implications
The Fed is set to announce a new interest rate decision in ten days. However, issues related to the Fed's independence have arisen due to ongoing legal proceedings involving Lisa Cook, a voting member. Despite President Trump's attempt to remove her, the Fed has retained her position on its website.
What’s Next for Cryptocurrencies?
While Trump has previously taken positive steps for cryptocurrencies, his recent drastic actions have raised caution among investors. They are inclined to mitigate risks this September, complicating the outlook for crypto investors in this period of uncertainty.
Labor Market and Inflation
Recent employment statistics have been disappointing, prompting most Fed members to acknowledge their critical importance. It appears that if inflation data falls short of expectations, this may lead to a 50bp rate cut, providing a potential bright spot amid the traditionally negative patterns of September.
September could prove challenging for cryptocurrency investors if the issues related to interest rates and the Fed's independence remain unresolved in the near term.
