Recently, a noteworthy signal has emerged internally within the Fed. Federal Reserve Board of Governors member Milan openly pointed out in public that there is a significant risk of upward bias in CPI data for the entire year. What does this mean? If the Fed continues to maintain its current policy framework without adjustments, this pricing pressure is likely to gradually elevate the risk of an economic recession. Once recession expectations are gradually established, the Fed will ultimately have no choice but to lower interest rates to stabilize the situation.

This is an important macro background for investors holding mainstream cryptocurrencies such as ETH and UNI. The crypto market has long been highly correlated with the policy direction of the Fed—an accommodative environment usually benefits risk assets, while recession expectations often lead to short-term volatility. From the current signals, the market is in an expected window of policy adjustment.