updates

🧵1/ Macro & Crypto: March 2025 FOMC Fallout

The Fed just held rates steady, but the impact ripples far beyond bonds. Let’s break down what the latest FOMC decisions mean for inflation, recession risks, and why crypto markets—especially BTC & ETH—just caught fire. 👇

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3/ Market Interprets This as Dovish 🕊️

While the Fed didn’t pivot, it blinked on QT. That’s liquidity-positive.
Powell flagged uncertainty (e.g., tariffs), but no urgency to tighten.
Forward guidance? Still penciling in 2 rate cuts by year-end.

4/ Inflation: Cooling, but with Caveats

🟢 CPI YoY (Feb): 2.8% — softest in 2+ years
🟢 Core CPI: ~3.1%, slowly trending lower
🟡 PPI: Flat MoM, YoY at 3.2%

Short-term relief, but tariff-induced costs could reverse this later in 2025.

5/ The Fed Is Not Fully Convinced

Goldman now sees core inflation sticking near 3% by Dec.
Wage growth is slowing, but not collapsing.
The Fed is buying time—not declaring victory.
Watch incoming CPI/PCE prints closely. 🔍

6/ Labor Market: Gradual Cooldown

🧊 NFP: +151K in Feb (vs. ~209K Q4 2024 avg)
📈 Unemployment: Up to 4.1%
⬇️ Participation rate: 62.4%, two-year low
💵 Wages: ~4% YoY, down but still firm

Translation: Goldilocks zone. Slower, not broken. Gives Fed room to cut—eventually.

7/ Recession Odds: Not If, But When?

🚨 Yield curve still inverted, but flattening
🧮 Atlanta Fed GDPNow: -2.4% Q1 est. (as of mid-Mar)
📉 U-6 (underemployment): Rising quietly
🎯 Prediction markets: ~40% chance of 2025 recession

We’re on a knife’s edge between slowdown and contraction.

8/ Crypto Loves Dovish Shifts

📈 BTC: +5% post-FOMC, breaking $85K
📈 ETH: +7%, back above $4.4K
🟢 Broad altcoin rally mirrors liquidity optimism


Liquidity returning, rate cut hopes rising = bullish signal for risk assets.

9/ Why Crypto Reacted So Strongly

✅ Slower QT = more dollar liquidity
✅ CPI cooling = Fed closer to easing
✅ Inflation fears = BTC narrative as digital gold gains traction
✅ Stocks didn’t sell off = tailwind for correlated risk assets

Macro tailwinds hit just as crypto sentiment firms.

10/ But Stay Tactical—Not Euphoric

⚠️ Risks:

CPI re-acceleration (tariffs, wage stickiness)

Recession surprise = risk-off dump

QT isn’t over—just slower

📈 Opportunities:

Soft landing + easier Fed = major upside

Institutional flows remain solid

Crypto remains macro-leveraged

11/ The Macro Playbook for Crypto?

🧠 Think in scenarios:

Disinflation + Growth: Crypto thrives

Stagflation: Volatility spikes

Recession + Hawkish Fed: Major pain

Liquidity Rebound: Rotation into BTC, ETH

Q2 2025 will be macro-dominated. Stay nimble.

12/ Final Take: Prepare for Whiplash

The Fed is holding—but not holding firm.
Inflation is cooling—but not killed.
Crypto is rallying—but not unshakable.

This isn’t “up only.” It’s “data dependent.” Position size and timeframes accordingly.

🧵/End
Follow for macro-to-crypto breakdowns → 🧠📉💡

2/ The Fed Stands Still—but Signals Change

🔹 Fed funds target: Unchanged at 4.25–4.50%
🔹 Balance sheet runoff: Slowing Treasury QT from $25B ➝ $5B/month
🔹 Powell: “Well-positioned” to adapt, eyes on inflation risks

One dissent (Waller wanted faster QT), but overall tone = cautious patience.

Soft lending is the most likely option so far, but things can quickly go wrong.
We need to be careful during these periods

This is super super solid! Thanks for sharing 🔥 
I guess the soft landing approach is most likely to happen
given that they don't want the stock market to crash for a reason so this will affect crypto market as well for sure

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Yes, don't hesitate to reread it afterwards and take the time to fully understand the different points

This is an educative write up…
I did fully understand, I’ll have to read through it again