In his testimony on Tuesday, Federal Reserve Chair Jerome Powell dampened hopes for another round of quantitative easing (QE), reiterating that \u201cQE is a tool we only use when rates are already at zero\u201d and that the Fed remains \u201ca long ways away from ending QT.\u201d This stance challenges the notion that a quick pivot to aggressive easing might buoy Bitcoin and the entire crypto market as it did in past cycles.<\/p>\n
Macro analyst Alex Kr\u00fcger posted<\/a> on X that \u201cwe are ages away from QE,\u201d stressing that some market participants needed to hear Powell\u2019s stance clearly. Another commentator, Tagoo, noted there is \u201cno need for QE, only for discontinuation of QT,\u201d prompting Kr\u00fcger to respond that it may take \u201ca few more months\u201d for QT to wind down.<\/p>\n Felix Jauvin, the host of the On the Margin podcast, commented<\/a> via X: \u201cFor the QE is coming soon dreamers, I hope you just heard what powell said \u201cQE is a tool we only use when rates are already at zero\u201d. You don\u2019t want zero rates and QE. That means a LOT of pain has to happen in the interim. QE isn\u2019t coming to save your overleveraged alt bags anytime soon.\u201d<\/p>\n Jauvin believes the US economy<\/a> has shifted from a period of stagnation to a more fundamental growth phase. According to him, \u201cwe can still see bull markets and a bid in risk assets without these monetary plumbing tricks,\u201d since he views this as a healthier, productivity-led environment\u2014one he calls \u201can economic golden age.\u201d<\/p>\n Dan McArdle reminded followers that markets can remain risk-on \u201cwith a decent economy and some credit expansion.\u201d He cautioned the crypto community against anchoring expectations solely to zero-interest-rate policies and QE, suggesting that a steady economy could still support Bitcoin\u2019s upside.<\/p>\n Julien Bittel, Head of Macro Research at Global Macro Investor (GMI), framed<\/a> Powell\u2019s comments within \u201cThe Everything Code,\u201d contending that QE is only one part of the global liquidity picture. While the Fed might not pivot to QE soon, Bittel pointed out that other factors, such as actions by the People\u2019s Bank of China, private credit creation, or shifts in the Treasury General Account, can also inject liquidity into markets. \u201cThe Fed\u2019s got other tools, and they\u2019ve been working with the Treasury since Covid to smooth out the QT impact through the TGA and RRP,\u201d Bittel remarked.<\/p>\n He reminded traders that \u201cit\u2019s not just the Fed in this equation\u201d and noted that Chinese rates heading toward zero heightens the possibility of China rolling out some form of QE<\/a>. \u201cBack in 2017, the Fed was a small player in the liquidity game. In fact, the Fed was doing QT and hiking rates all year, yet risk assets still flourished and Bitcoin did a 23x following the sharp but short 28% correction in January,\u201d he added.<\/p>\n