Recent developments in the financial markets have been truly spectacular. Former President Trump's latest comments on Jerome Powell have attracted widespread attention—initially stating "no plans to dismiss," then implying "it's too early to make a final decision," while also revealing two potential successors. The message is clear: for Powell, this is not a pardon but a "conditional reprieve."

By observing the positions of these two candidates, the clues become evident. One advocates for aggressive rate cuts, believing that AI factors can offset inflationary pressures; the other insists on shrinking the balance sheet before discussing rate cuts, taking a conservative stance. Whoever ultimately takes over, the Federal Reserve's policy space will be severely constrained. Trump's move is straightforward—using personnel pressure to force the Fed to align with rate cut expectations, thereby boosting the stock market and lowering U.S. Treasury yields. This will directly impact liquidity expectations in the cryptocurrency market.

However, it is important to note that the latest Beige Book from the Federal Reserve presents a different picture. Out of the 12 Federal Reserve districts, 8 report moderate economic growth, strong holiday consumption data, and stable unemployment rates. It sounds like everything is improving? But a closer look reveals issues. Almost all regions mention the pressure from tariff costs, with businesses beginning to pass these costs onto consumers through higher prices. The increases in prices for essentials like rent and food still persist, posing real constraints on the realization of rate cut expectations.

Market participants need to be alert to the tension between policy and reality. On one hand, there are rate cut expectations driven by political pressure; on the other, persistent structural inflation pressures. Under this contradictory situation, the volatility of crypto assets may further increase.