Financial And Crypto Markets Under Pressure Ahead Of The FED's Decisions

The financial and crypto markets continue to experience sharp declines, as investors await inflation data and decisions from the FED. Despite favorable regulatory advances, bitcoin and ethereum are plunging, seeking a deliverance that will certainly come from the forthcoming data on the CPI and the FOMC. But what will it really be like?

The crypto market and the stock market are shaking!

Wall Street continues its bearish trend started this Monday, recording a sharp correction. Indeed, the S&P 500 is down 2.6%, the Nasdaq-100 drops 3.1%, and the Dow Jones retreats by 2.2%. This tension has impacted Asia, where futures for the Nikkei 225 and the Hang Seng indicate further losses. In this context of nervousness, bitcoin has fallen by 5.8% to $76,838, while ethereum has plummeted 11.5% to $1,795.

As the crypto market feels the pressure, the Trump administration is preparing an executive order aimed at revoking the banking restrictions imposed under Biden. The initiative would seek to cancel “Operation Chokepoint 2.0”, a controversial policy that allegedly limited crypto companies’ access to banking services. This initiative had already been announced last January by Travis Hill.

The decree could also clarify the status of stablecoins and relax the FED’s rules regarding banks holding digital assets. This shift aligns with the White House’s new pro-crypto direction, following recent statements by Trump about creating a national bitcoin reserve.

CPI and FOMC: Challenges for risk assets

Investors are eagerly awaiting the publication of the consumer price index (CPI) on Wednesday, March 12, 2025, which is expected to show an increase of 0.3% in February (compared to 0.5% in January). The annual inflation rate is expected to be 2.9%, slightly down from 3% in January. Any upside surprise could delay the rate cuts projected by the FED, putting further pressure on the stock and crypto markets.

Moreover, the upcoming FOMC meeting on March 18 and 19, 2025, could have a devastating effect on cryptos, particularly bitcoin.

As the crypto market capitalization continues to fall, the FED’s tightening monetary policy is causing concern. However, some analysts believe that the recent drop in the dollar, the largest since the financial crisis of 2008, could boost the markets in the coming months.