- The US government shutdown could extend beyond the weekend, leading to economic action.
- Federal Reserve rate cuts are part of a broader economic strategy to manage volatility.
- Past shutdowns have caused increased risk premiums and market instability.
Kevin Hassett, White House Economic Advisor, indicated government shutdown risks could escalate if sustained, while hinting at expanded Federal Reserve rate cuts, reported October 17, via BlockBeats News.
This scenario could influence financial and cryptocurrency markets, sparking volatility, adjusting risk assessments, and impacting liquidity.
Market Instability Fears as Negotiations Stall
Kevin Hassett indicated optimism about the US staying ahead in the credit market, despite the ongoing government shutdown. He emphasized potential economic actions if negotiations falter between the presidency and Democratic Party regarding federal funding. President Trump’s strategy could involve increasing pressure on decision-making entities to reach a resolution.
Hassett also indicated that upcoming Federal Reserve rate cuts are seen as merely the beginning of a broader economic strategy. As Hassett stated, “The anticipated three interest rate cuts are just the beginning.” These cuts may amplify market volatility, influencing both traditional and crypto markets in the near term.
In response to these developments, market analysts are voicing concerns over instability. Statements by Hassett concerning potential large-scale layoffs and the expected setback in negotiations further heightened market fears. General sentiment anticipates increased volatility in financial markets if governmental negotiations remain stagnant.
Market Data and Insights
Did you know? Previous US government shutdowns in 2013 and 2018-2019 led to increased risk premiums and financial market instability. Such scenarios often translate into risk-off behavior among investors, affecting both traditional and cryptocurrency markets.
According to CoinMarketCap, Ethereum (ETH) currently trades at $3,779.60, with a market cap of $456.19 billion and a 24-hour trading volume of $62.80 billion, reflecting a 37.24% change. Recent weeks have seen a price decline across various periods.
Coincu research team suggests that potential Federal Reserve rate cuts could inspire riskier financial behaviors among investors, as they attempt to capitalize on forecasted economic strategies. Volatility may increase, with historical trends indicating shifts in asset allocations, affected by macroeconomic developments.
| DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing. |
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