The context: the American federal reserve, commonly called “Fed” is the entity responsible for the financial system of the United States. This system is notably responsible for managing the country’s financial crisis situations. Although the federal reserve has not announced a change of course, liquidity seems to say any other. The consequences are notably felt through asset classes, yields of treasury bills to the loss of $ 500 billion accused by the Bitcoin market. A bomb with a delay of 6.5 billions of dollars the subject of a trade war between the United States and many nations of the world is at the heart of current chaos. Last week, the spokesman for the Chinese Foreign Ministry of Foreign Affairs, Lin Jian, said that Beijing “would fight to the end” against the customs duties proposed by Donald Trump, who now reach up to 104 % on certain Chinese products. This virulent rhetoric also reflects the emblematic posture of China, known as the “wolf warrior”. However, in the background, the pressure rises. “The Chinese people are not looking for the problems, but we are not afraid,” said Lin to journalists. However, with the slowdown in exports and the rise in concerns concerning the leakage of capital, Beijing’s position could soon become more a question of economic survival than of ideological posture. In addition, behind the scenes, a real strategy game takes place on the edge of the abyss. The renowned analyst Peter Duan believes that Trump tax pressure would finally aim to lower the yields of treasury bills to 10 years, while the United States faces a colossal debt of 6.5 billions of dollars that will expire in the coming months. “Trump forces pricing wars to lower the rate of treasury bills to 10 years … China sells American treasury bills to raise the yield,” wrote Duan. By selling treasury bills, China has intensified economic tensions, causing unexpected consequences. Among these, an outbreak of yields and a decrease in demand on the bond markets, even though the United States most needs refinancing. Does the Fed discreetly inject liquidity? The Fed, stuck between inflation and tax burden, seems to have responded by discretion rather than by public announcements. The Reverse Repo Facility (RRP) of the Fed would be the most obvious proof of a discreet flood of liquidity. After having crossed more than 2.5 dollars in 2022, the RRP sales dropped to only $ 148 billion, representing a 94 %drop. “It is not a question of illusory hope. These are real liquidity that are released. While people get carried away on the prices, inflation and trauma of SVB … The biggest discreet softening since 2020 is in progress, “wrote Oz, founder of The Markets Unplugged. Reverse repo facility of the Fed. Source: Fred economic data would be a major situation, because the drop in RRP sales means that money returns to the system. This would feed the rallys of risky assets, as it is equivalent to a quantitative relaxation, without namely in this way. However, the RRP is almost exhausted, arousing warnings from analysts. “The drop in RRP adds liquidity to the market. There is not much left in the RRP account, which means that it cannot provide much liquidity. There will be a short relief rally, but no new historical heights this year, “noted a trader of options. However, Oz disputes these words, saying that although the RRP is almost exhausted, which means the end of an influential factor in the background, this does not necessarily mean the end of the rally. The Fed dilemma: inflate or give way? The consumption trader, a well -known analyst on X (Twitter), exposed the current issues. He claims that if the Fed lets liquidity are dried up more, cascade deleveraging could trigger a crisis in its own right. “In any case, a decline is to come. If the markets give in first, the sale prepares the land for a quantitative relaxation. If quantitative relaxation begins first, intelligent money will sweep the hollows before liquidity increases assets at risk, ”he notes. This means that the Fed, by officially taking up a quantitative softening, would risk stirring inflation or swelling bubbles. Since April 2, the Bitcoin market capitalization has lost more than $ 500 billion, while its course has dropped below $ 75,000 before a modest recovery. Altcoins have experienced worse, struck by both the drop in liquidity and macroeconomic fear. The English -speaking Beincrypto team has also reported that the chances of a formal return of quantitative relaxation in 2025 increased, which could mark a turning point for digital assets. The liquidity cycles previously dictated the boom and decline phases of the crypto. In 2020, in particular, quantitative relaxation fueled a “rally of everything”, and during which Bitcoin and Altcoins finally have historical heights. If a quantitative softening hitherto hidden becomes open, one could attend a similar situation. “You don’t need a drop in rates. You already have an in progress liquidity push … Liquidity says: ‘Put your helmet. You are about to run after green candles to historical heights, “added Oz. These words also align with the recent prediction of Hayes according to which Bitcoin could reach $ 250,000 if the Fed goes to quantitative relaxation. However, the market could cope with a new crypto winter if the Fed hesitates or if global liquidity is fragmented. The Fed’s silence is not necessarily synonymous with inaction. With the almost dry RRP, growing trade tensions and the markets of treasury vouchers, discreet liquidity injections could be the first gesture within a situation with numerous ramifications. Thus, according to analysts, this situation could end with a new Bull Crypto or on the contrary something worse … and everything would depend on how long the Fed will keep the secret. Morality of the story: a Fed which dans the shadows makes more noise than a criemer. Notice of non-responsibility Non-responsibility notice: In accordance with the guidelines of The Trust Project, BEINCRYPTO undertakes to provide impartial and transparent information. This article aims to provide exact and relevant information. However, we invite readers to verify the facts of their own and consult a professional before making a decision on the basis of this content.
