Bitunix Analyst:The Market』s Real Concern Is No Longer Rate Cuts—It』s Whether the Fed Is Accepting「Prolonged High Rates」

BlockBeats News,On April 30, markets had almost fully priced in a Fed hold, shifting the focus to a more critical question: Is the Federal Reserve reconsidering rate hikes as an active option? This is why long-term U.S. Treasury yields have recently approached 5%, with markets increasingly betting on long-duration bond declines.

Over the past two years, the Fed treated energy, tariffs, and supply chain shocks as「one-off inflation,」so even amid oil price volatility, the market expected an eventual return to a rate-cut cycle. However, with the Middle East conflict entering its third month and Brent crude up roughly 50% since the outbreak, the Fed is now publicly questioning: if one-off shocks recur, can they still be considered「one-off」?

This is the real risk tonight. The market isn』t worried about an immediate hike, but whether Powell will formally acknowledge that high oil prices and supply chain issues may be feeding core inflation. Once the Fed accepts this logic, the narrative of「prolonged high rates」will return to the market』s main storyline.

This is the real risk tonight. The market isn』t worried about an immediate hike, but whether Powell will formally acknowledge that high oil prices and supply chain issues may be feeding core inflation. Once the Fed accepts this logic, the narrative of「prolonged high rates」will return to the market』s main storyline.

This is the real risk tonight. The market isn』t worried about an immediate hike, but whether Powell will formally acknowledge that high oil prices and supply chain issues may be feeding core inflation. Once the Fed accepts this logic, the narrative of「prolonged high rates」will return to the market』s main storyline.

Adding to the stakes, this meeting may be Powell』s last as FOMC Chair. Kevin Warsh, a Trump nominee and known hawk, is nearing confirmation. Should Powell also step down from his Board seat, Trump would gain a historic opportunity to reshape the Fed』s power structure.

For markets, the real trade isn』t tonight』s rate decision—it』s how the next Fed will redefine inflation and rates. This underpins the recent high volatility in USD, U.S. Treasury yields, and gold.

For crypto, BTC remains supported by risk-on capital flows and ETF demand. But if the Fed signals that rate hikes cannot be ruled out, high-valuation tech stocks and crypto could face renewed liquidity pressure. In the short term, the key is not rates themselves, but whether Powell is willing to reopen the door to「rate hike expectations.」

For the crypto market, BTC is currently still benefiting from capital flowing back into risk assets and ETF demand support. However, if the Fed begins to signal "not ruling out rate hikes," both overvalued tech stocks and the crypto market may face liquidity pressure again. What truly needs to be observed in the short term is no longer just the interest rate itself, but whether Powell is willing to reopen the door to "rate hike expectations" for the market.