A Federal Reserve official has issued a stern warning that will likely hit Bitcoin and popular altcoins like Solana (SOL), Pi Network (PI), Shiba Inu (SHIB), and Polkadot (DOT) in the near term.
Mary Daly Warns on Interest Rates
In a statement, Mary Daly, the head of the San Francisco Fed, warned that the central bank may still decide to maintain high interest rates for longer. She cited the recently announced tariffs by Donald Trump and their impact on inflation. She said:
“The risks to inflation are more elevated than they were a year ago, so the consequence of that is we might have to hold policy tighter for longer than we had thought. We have plenty of time, and we’re in a good place to kind of wait this out a bit.”
Her statement differed from that of other Fed officials who have hinted that the bank was ready to intervene and bailout the market. The most popular tools the Fed uses in times of uncertainty are interest rates, quantitative easing, and swap lines with other central banks.
Fed Policies Could Impact Solana, Pi Network, Shiba Inu, Polkadot, and Other Altcoins
Her view that the Fed is ready to wait it out adds significant implications for market stability because it may cause chaos in the market soon. That’s because Donald Trump has expressed his displeasure with Jerome Powell for his handling of monetary policy. And according to his top economic advisor, he is considering firing the Fed chair.
Trump believes that the Fed should cut interest rates, citing the recent data that showed that inflation was falling. The most recent data revealed that the headline consumer inflation dropped to 2.4% in March.
He also believes that the Fed is being left behind by other central banks like the European Central Bank (ECB) that has delivered seven interest rate cuts.
Therefore, a decision to fire Powell would cause chaos in the crypto market that would hit altcoins like Solana, Pi Network, Shiba Inu, and Polkadot. Such an action would lead to a loss of confidence in the value of the US dollar, especially if the Supreme Court allows it to stand.
This chaos would come at a time when the US dollar index has plunged, and the S&P 500, Nasdaq 100, and Dow Jones have formed a death cross pattern.
These altcoins struggle under higher-for-longer interest rate policies but historically thrive when the Fed slashes interest rates.
