Monetary Policy

U.S. Treasury Secretary Scott Bessent criticized the Financial Times report about his support for a accountability mechanism similar to that of the Bank of England, calling it "a complete fabrication." He emphasized that he had not proposed any related plans and expressed disdain for the Bank of England's communication mechanism. This incident reflects the sensitivity of the U.S. regarding the independence of its monetary policy, and it could impact the cryptocurrency market.

David Sacks has concluded his 130-day tenure as the White House's cryptocurrency and artificial intelligence affairs chief and will transition to co-chair of the President's Council of Advisors on Science and Technology, continuing to influence U.S. technology policy. He will focus on advancing a unified regulatory framework for artificial intelligence and engage in policy research across several key areas. This change may affect the future coordination of cryptocurrency and AI regulation.

The regulatory landscape for cryptocurrency in the U.S. is changing, as David Sacks concludes his term in the Trump administration and transitions to co-chair of the Technology Advisory Council, leading to concerns about the continuity of digital asset policy. The outlook for the CLARITY Act has become uncertain, with the market focusing on future legislative developments and the emergence of new policy leaders.

Gate News reports that on March 27, the Bank of Japan stated that, according to the latest data, Japan's estimated natural interest rate (the neutral rate that neither stimulates nor suppresses the economy) is between -0.9% and +0.5%. The Bank of Japan pointed out that, given the uncertainty in estimating the natural rate, it is necessary to comprehensively evaluate the degree of monetary easing, while carefully examining the trends in economic activity, prices, and financial developments.

Global market performance looks stable on the surface, but internal imbalances remain. Geopolitical risks still exist. Countries are withdrawing liquidity and stabilizing their domestic currencies through different measures; the inflation logic has shifted somewhat, and a strengthening U.S. dollar reflects liquidity being withdrawn. In the crypto market, BTC is consolidating within a range-bound, choppy zone, with price volatility kept in check. In the short term, it’s necessary to watch for changes in the macro environment to find a trend breakout.

Recently, after experiencing a net inflow for seven consecutive trading days, the US Bitcoin spot ETF saw a significant outflow, with a net outflow of $163.5 million on the 18th and an additional outflow of $51.9 million on the 19th, indicating a simultaneous weakening of market funds and prices. The price of Bitcoin briefly dropped below $70,000, highlighting that the fund flows into the ETF can no longer support its rebound, and the deteriorating macro environment is putting pressure on risk assets, leading to a noticeable contraction in investor preferences. The testing of the $70,000 threshold has become a barometer for short-term market sentiment.

Zhou Xiaochuan emphasized at the Boao Forum for Asia that a good payment system needs to adapt to various technologies and regulations, especially in the areas of anti-money laundering and anti-fraud. He pointed out that while digital currencies have applications, they also bring risks of online fraud, calling for cautious treatment of stablecoins and crypto technology to enhance compliance.

Zhou Xiaochuan emphasized at the Boao Forum that the key to payment systems lies in adaptability, rather than a single technology. He pointed out that while digital currencies are used by central banks, they also contribute to online fraud, and the ability to combat fraud urgently needs improvement. He mentioned that stablecoins bypass compliance issues and called for in-depth consideration rather than blindly following trends.

On March 27, Gate News reported that the basis for the Bank of Japan to raise interest rates in April has become more robust, as the output gap and price trends indicate economic resilience. Kenji Yamamoto, an economist at Daiwa Securities, pointed out that although inflation may temporarily slow, the underlying price trend remains stable, supporting the normalization process of monetary policy.

BlockBeats News, March 27 — According to CoinDesk, Federal Reserve legal official Brett Guynn stated that there are currently no ongoing plans to develop a central bank digital currency (CBDC).

Gate News reports that on March 27, Federal Reserve legal officer Brett Guynn stated that there are currently no ongoing plans to develop a central bank digital currency (CBDC).

The article states that Iran has not proactively requested the U.S. to suspend its energy strikes, contradicting Trump's claims. The ceasefire negotiations are progressing poorly, with Iran responding strongly to the U.S. proposal at 3 p.m., refusing to discuss nuclear weapons and missile issues. The passage of oil tankers through the Strait of Hormuz is seen as a symbolic progress, but there has been no substantial breakthrough. This situation affects the performance of risk assets like Bitcoin, and the OECD warns that if the conflict continues, U.S. inflation could rise.

U.S. Treasury Secretary Janet Yellen denied reports that she discussed adopting the Bank of England model to strengthen oversight of the Federal Reserve, calling them "false reports" and criticizing the Financial Times. Yellen accused the FT of fabricating the story and damaging journalistic credibility.

Citi Group has lowered its 12-month target prices for Bitcoin and Ethereum, indicating a more cautious outlook for the mid-term prospects of the crypto market, mainly due to slow progress in U.S. cryptocurrency legislation. The Bitcoin target has been reduced from $143,000 to $112,000, and Ethereum from $3,175. Although there is still upward potential in the future, the lack of new policy catalysts suggests that prices may fluctuate within a range in the short term. Citi's assessment of Ethereum is more cautious, believing it is more affected by on-chain activity.

Gate News reports that on March 26, according to CME "FedWatch" data, the probability of the Federal Reserve raising interest rates by 25 basis points in April is 6.2%, while the probability of holding rates steady is 93.8%. The probability of a total increase of 25 basis points by June is 19.9%, a total increase of 50 basis points is 1.0%, and the probability of keeping rates unchanged is 79.2%.

JPMorgan's report indicates that Bitcoin has shown greater resilience compared to gold and silver amid worsening liquidity and capital outflows. Gold has fallen about 15% this month, with liquidity indicators dropping below Bitcoin. Capital flow and position data also show a clear divergence, with Bitcoin ETFs continuing to experience net inflows.

UBS指出, due to inflation and geopolitical risks, the Federal Reserve is expected to delay interest rate cuts until September, with another possible cut in December. Economists say the Fed is waiting for evidence of inflation and remains cautious, so the timing of rate cuts is still uncertain.

Analyst Benjamin Louvet from OpFi Investment pointed out that the Federal Reserve faces challenges in balancing inflation and employment, and may not choose to raise interest rates. Additionally, declining revenues in Gulf countries could impact U.S. debt financing, forcing the Fed to lower interest rates or resume bond purchases.

According to OECD forecasts, the Middle East war is driving up global inflation and weakening the economy, with the US inflation rate expected to reach 4.2%. Central banks around the world are becoming more cautious with monetary policy; the Federal Reserve may delay interest rate cuts, while the European Central Bank might raise rates. The energy crisis has become a major obstacle to the global economy.