INSUBCONTINENT EXCLUSIVE:
Key takeaways:The Federal Reserve may cut rates early if global trade, the energy supply or the US relationship with the Middle East
rates steady at 4.25% on Wednesday, a decision that had been widely anticipated by investors
The next monetary policy meeting is scheduled for July 30, but the Fed could act earlier if a major disruption occurs
factors might compel the central bank to shift away from its current cautious stance.US war in the Middle East tensions and trade risks
could force rate cutsEmergency interest rate cuts are rare, and usually follow a credit shock, geopolitical escalation, or a sudden
breakdown in financial stability
The last such cut came in March 2020, when the Fed slashed rates by 100 basis points in reaction to the global spread of COVID-19.S&P 500
Bitcoin/USD (right) in 2020
Source: TradingView and CointelegraphInvestor sentiment plummeted during the early panic, and even gold dropped to a seven-month low
Still, the long-term impact favored risk assets
The S&P 500 recouped its losses by late May 2020, while Bitcoin reclaimed the $8,800 level by late April 2020
In essence, the panic subsided in less than three months.Despite adoption by major corporations as a treasury reserve, Bitcoin remains
strongly correlated to tech stocks
Between March and May 2025, its 30-day correlation with the Nasdaq 100 stayed above 70%
Investors continue to view Bitcoin as a high-beta play on future economic growth.Bitcoin/USD 30-day correlation vs
Source: TradingView and CointelegraphRising tensions in the Middle East have reemerged as a major macro risk
The Strait of Hormuz handles roughly 20% of the worldwide oil and gas supply
Any disruption there increases energy costs and uncertainty
As businesses reduce operations under such conditions, inflation expectations cool and hiring slows, creating room for monetary easing.Trade
remains another source of fragility
If the temporary tariff truce between the US and China collapses, or if key partners like Canada or the EU abandon negotiations, US exports
To counteract weakening demand and protect the domestic industry, the US Fed may resort to rate cuts that support credit expansion and
The 20-year Treasury yield has climbed to 4.9% from 4.6% over the past three months, a sign that investors still doubt inflation is under
Source: TradingView and CointelegraphMeanwhile, the US Dollar Index (DXY) has dropped to 99 from 104 in March, nearing its lowest level in
If markets read a surprise cut as a signal of recession risk, the US dollar could weaken further
In that scenario, demand for inflation-resistant assets like Bitcoin may rise sharply, making a breakout above $120,000 not just possible,
but increasingly logical.This article is for general information purposes and is not intended to be and should not be taken as legal or
