2025-12-29 14:21:31

Recently, the controversy surrounding the Federal Reserve has intensified, fundamentally reflecting a disagreement over the direction of monetary policy. Currently, the Federal Reserve's benchmark interest rate remains in the 3.5%-3.75% range, while the U.S. annual interest expense on national debt alone exceeds $1.32 trillion. This expenditure exerts substantial pressure on long-term debt management—America's total debt has reached $37.7 trillion.

There are voices advocating for a rate cut to around 1%, which would save approximately $400 billion annually in interest costs for each 1 percentage point reduction. This highlights the entanglement policymakers face between monetary policy and fiscal pressure—some believe the current rate cut is insufficient and that the pace is relatively conservative.

At the same time, there are internal disagreements within the Federal Reserve regarding policy direction. Some officials insist on a cautious monetary stance and are reserved about unlimited easing. The influence of these dissenting voices in decision-making is a matter worth observing.

From a broader macro perspective, these debates reflect market participants' concerns about the future trajectory of monetary policy. Interest rate policies impact the entire financial ecosystem, from traditional bonds to crypto assets, and will be significantly affected. The Federal Reserve's independent decision-making space faces unprecedented pressure, and this tension may gradually manifest in future policy implementation.

In any case, this debate over monetary policy has transcended mere economic discussion, involving the stability of the financial system and the re-adjustment of market expectations. Investors and traders need to prepare for various policy scenarios.

View Original

This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.

11 Likes

Reward
11
6
Repost
Share

Comment

0/400

MetaDreamer

· 12h ago

1.37 trillion in interest expenses? That number is really outrageous, the Federal Reserve is being roasted on the fire 2. Cutting interest rates to 1% to dream? The cautious camp is probably going to hold back again 3. The crypto market this time will follow risk sentiment again, gotta keep a close eye on what the Fed folks are saying 4. 1.32 trillion disappeared in a year, no wonder some are eager to cut interest rates 5. 37.7 trillion in debt, it seems someone will have to pay for this 6. The greater the internal disagreement, the better; this gives the market room to operate 7. Feels like the Federal Reserve is becoming more and more divided, how much independence is left? 8. Every time interest rates move, the whole market trembles, including the crypto space 9. Preparing for multiple scenarios? Basically, it's a gamble on policy 10. The temptation of 400 billion dollars, who can resist it?

View OriginalReply0

ChainSherlockGirl

· 20h ago

$37.7 trillion in debt looming overhead, the Federal Reserve's game is getting harder and harder to play --- Cutting to 1% could save $400 billion? Sounds wonderful, but who believes it? Surely there are big on-chain whales I haven't seen hoarding something --- Basically, they want to print money but are afraid of inflation, want to cut rates but fear debt defaults. This is the financial version of Schrödinger's cat --- Internal disagreements are my favorite. Based on my analysis, the negotiation process between hawks and doves is definitely more complicated than on-chain transfers --- Regarding crypto, it depends. If rates are cut, coins will rise; if not, we'll continue the bear market. Let's bet on a complete turnaround, everyone --- $1.32 trillion in annual interest payments... Oh my, that's higher than the GDP of some countries. The US government’s wallet is really about to break --- Unprecedented pressure on the Federal Reserve's independence? Interesting, feels like the next plot twist is about to happen --- Risk warning: I'm just casually analyzing, don't go all-in based on my words, everyone

View OriginalReply0

ZenZKPlayer

· 20h ago

Cutting interest rates to 1%? Wake up, everyone. The Federal Reserve wouldn't dare be so aggressive. With $37.7 trillion in debt hanging over our heads, let's see how the hawks play it. Lowering interest rates and controlling inflation at the same time—aren't they making things difficult for us? The crypto market is laughing, waiting to see the result of the Federal Reserve's internal conflicts. When interest rates move, the crypto world turns upside down. We are just pawns. Really don't know what the market will do this year. Better to hold and wait.

View OriginalReply0

SnapshotBot

· 20h ago

Lower interest rate to 1%? Brother, are you dreaming? The Federal Reserve is being roasted on the fire, and there's really no way to loosen easily. This debt scale... no matter how much money we ordinary people earn, we can't fill it. The crypto market is trying to kill us; every rate change causes chaos. Anyway, just waiting to watch the show. The Federal Reserve can't even control itself.

View OriginalReply0

ponzi_poet

· 21h ago

A 1 percentage point cut can save 4 trillion yuan? That number sounds great, but can the debt paper really be torn off? The Federal Reserve's internal conflicts are truly intense; everyone wants to say a few words. Cryptocurrency will follow interest rate movements; get ready for many maneuvers. 3.7 trillion yuan in debt... when will this black hole be filled? Instead of arguing, look at the data; no matter how interest rates move, you can't avoid it. The figure of 37.7 trillion yuan is getting more and more outrageous; why can they still stay so calm? Are interest rate cut proponents really short of money or just want to cut the leeks? The Federal Reserve's "independence"? Who still believes that now, with fiscal pressure right there. Both traditional bonds and the crypto world are subject to interest rates; there's no escape. The more this fight is fought, the more it becomes clear; once interest rates change, everything is doomed.

View OriginalReply0