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18 Mar 2026, 17:35

Federal Reserve Braces for Stagflation Threat as Interest Rate Decision Looms

BitcoinWorld Federal Reserve Braces for Stagflation Threat as Interest Rate Decision Looms WASHINGTON, D.C. — March 12, 2025 — The Federal Reserve faces a critical policy dilemma as it prepares to announce its latest interest rate decision. Market analysts and economists widely anticipate the central bank will hold its benchmark rate steady. This cautious stance emerges against a troubling economic backdrop: the simultaneous rise of persistent inflation and slowing growth, reviving fears of a stagflation scenario not seen in decades. Federal Reserve Expected to Maintain Current Interest Rates The Federal Open Market Committee (FOMC) concludes its two-day meeting today. Consequently, most observers predict no change to the federal funds rate. This target currently sits within a range of 4.50% to 4.75%. Recent economic data presents a conflicting picture, forcing the Fed into a holding pattern. Therefore, policymakers require more time to assess whether inflationary pressures are durably cooling. Simultaneously, they must gauge the true strength of the labor market and overall economic activity. Chair Jerome Powell has repeatedly emphasized a data-dependent approach. The central bank’s dual mandate requires balancing maximum employment with price stability. Recent Consumer Price Index (CPI) reports show inflation remains stubbornly above the Fed’s 2% target. However, Gross Domestic Product (GDP) growth has noticeably decelerated over the past two quarters. This combination creates a significant policy challenge. Understanding the Growing Stagflation Risks Stagflation describes a rare and difficult economic condition. It combines stagnant growth, high unemployment, and rising inflation. This phenomenon plagued the U.S. economy during the 1970s. Several key indicators now suggest similar risks are mounting. First, core inflation has proven more persistent than many models predicted. Second, productivity growth has stalled. Third, global supply chain pressures have re-emerged due to geopolitical tensions. The following table compares current economic signals with historical stagflationary periods: Economic Indicator Current Reading (Q1 2025) 1970s Stagflation Average CPI Inflation (Year-over-Year) 3.8% 7.1% Unemployment Rate 4.1% 6.7% GDP Growth (Quarterly) 1.2% 2.1% Productivity Growth 0.5% 1.3% While current figures are less severe, the directional trend causes concern. Importantly, the Phillips Curve relationship between inflation and unemployment appears to have broken down. This breakdown complicates traditional monetary policy responses. Expert Analysis on the Fed’s Policy Constraints Leading economists highlight the Fed’s constrained options. “The central bank is navigating without a clear historical playbook,” notes Dr. Anya Sharma, Chief Economist at the Brookings Institution. “Aggressive rate hikes could tip a fragile economy into recession. Conversely, premature rate cuts could re-ignite inflation expectations, making them harder to control later.” This analysis underscores the delicate balancing act. Market participants will scrutinize the Fed’s statement and Chair Powell’s press conference for clues. Key areas of focus will include: Forward Guidance: Any changes to language about future policy paths. Balance Sheet Policy: Signals regarding the pace of quantitative tightening. Economic Projections: Updates to the Summary of Economic Projections (SEP), especially the “dot plot.” Financial conditions have tightened significantly over the past year. Higher borrowing costs are now affecting business investment and consumer spending on big-ticket items. The housing market, in particular, has cooled in response to elevated mortgage rates. The Global Context and Impact on Monetary Policy The Federal Reserve does not operate in a vacuum. Major central banks worldwide face similar dilemmas. The European Central Bank (ECB) and the Bank of England are also pausing their hiking cycles. However, their inflation dynamics differ due to energy market exposures. This global synchronization of cautious policy reflects shared concerns about growth momentum. Furthermore, fiscal policy adds another layer of complexity. Government spending remains elevated in several major economies. This spending can counteract the Fed’s tightening measures, potentially fueling demand-pull inflation. The upcoming presidential election cycle also introduces political uncertainty. Historically, the Fed strives to maintain its independence during election years. Nevertheless, political pressure on monetary policy often intensifies. Potential Scenarios and Economic Outcomes Economists outline several potential paths forward. A “soft landing” remains the Fed’s stated goal. This scenario involves inflation returning to target without causing a severe recession. Achieving this requires precise calibration of policy. A second scenario involves a prolonged period of economic stagnation with mild inflation, often called “mild stagflation.” A third, more severe scenario is a return to 1970s-style stagflation, requiring a painful Volcker-style policy response. The Fed’s credibility is its most important asset. If businesses and consumers believe the Fed will ultimately control inflation, their expectations will remain anchored. Well-anchored expectations make the Fed’s job considerably easier. Recent surveys, however, show a slight uptick in long-term inflation expectations. The central bank will likely address this point directly in its communications. Conclusion The Federal Reserve’s impending decision to hold interest rates underscores the profound economic uncertainty of 2025. The growing risk of stagflation presents a formidable challenge for monetary policymakers. Consequently, the Fed is prioritizing flexibility and data analysis over pre-emptive action. The coming months will be crucial for determining whether the U.S. economy can avoid a stagflationary trap. All eyes will remain on incoming data regarding inflation, employment, and growth. The Federal Reserve’s careful navigation through these crosscurrents will define the economic trajectory for years to come. FAQs Q1: What is stagflation and why is it a problem for the Fed? A1: Stagflation is the simultaneous occurrence of stagnant economic growth, high unemployment, and rising inflation. It is a major problem because the Fed’s standard tools are less effective. Raising rates fights inflation but can worsen a slowdown, while cutting rates stimulates growth but can accelerate inflation. Q2: When will the Federal Reserve announce its interest rate decision? A2: The Federal Open Market Committee (FOMC) announces its decision at 2:00 p.m. Eastern Time on the final day of its scheduled meeting, followed by a press conference with Chair Powell at 2:30 p.m. Q3: What economic data is the Fed most focused on right now? A3: The Fed is closely monitoring core PCE inflation (its preferred gauge), non-farm payrolls and wage growth, consumer spending reports, and business investment surveys. It uses a wide array of data to assess the health of both the labor market and price stability. Q4: How does the current situation compare to the 1970s stagflation? A4: While concerning, current inflation and unemployment levels are significantly lower than the 1970s peaks. The structure of the global economy is also different. However, the concurrent presence of above-target inflation and slowing growth echoes that earlier period, warranting caution. Q5: What would cause the Fed to start cutting interest rates in 2025? A5: The Fed would likely consider rate cuts if there is clear, sustained evidence that inflation is converging to its 2% target, coupled with signs of a sharp deterioration in the labor market or a contraction in economic activity. A significant financial stability event could also prompt emergency action. This post Federal Reserve Braces for Stagflation Threat as Interest Rate Decision Looms first appeared on BitcoinWorld .

18 Mar 2026, 17:30

XRP Liquidations Accelerate After $1.50 Breakout: Short Squeeze Unfolds

XRP has reclaimed the $1.50 level as market activity accelerates and bullish momentum begins to build after weeks of consolidation. The move higher suggests that buyers are regaining control, with traders closely watching whether XRP can sustain this breakout and establish a stronger uptrend. Related Reading: Ethereum Whales Step In: $33M ETH Withdrawn From Exchanges In Hours Beyond price action, derivatives data is revealing a notable shift in market behavior. According to a recent CryptoQuant report, multiple indicators are now signaling activity levels not seen in weeks, pointing to a renewed wave of participation across XRP markets. In particular, the Multi-Exchange Open Interest Delta is showing clear signs of expansion. This metric tracks the net change in total open contracts across major derivatives platforms over a given period, offering insight into how traders are positioning. A positive Open Interest Delta indicates that new positions are being opened, reflecting growing participation and capital inflows into the market. Conversely, a negative reading suggests that traders are closing positions, which typically signals reduced activity or risk-off behavior. Recent data shows a sustained increase in open interest, suggesting that traders are actively entering the market rather than exiting. For analysts, this shift often signals rising conviction and increasing speculative interest, conditions that can support stronger price movements if accompanied by continued demand and favorable market structure. Open Interest Surge and Liquidations Drive XRP Breakout Dynamics The CryptoQuant report provides a broader perspective by tracking Open Interest Delta across six major derivatives exchanges, offering a comprehensive view of how traders are positioning in XRP. The data reveals two distinct waves of position building that preceded the recent breakout. On March 13, open interest increased by approximately $16 million, followed by a second surge on March 16, where an additional $18 million in positions were opened. This sequence is structurally important, as it shows that traders were actively building exposure before XRP broke above the $1.50 level, marking the asset’s first return to this price zone since February 15. At the same time, liquidation data highlights the impact of this positioning. XRP’s move above $1.50 forced significant liquidations on short positions, proving that the breakout caught many traders off guard. The prior increase in open interest played a key role in this dynamic. Higher leverage across the market meant that once the price moved against short positions, forced liquidations accelerated the move, adding momentum and volatility. This combination of pre-breakout positioning and post-breakout liquidations suggests that derivatives activity amplified XRP’s rally beyond spot demand, creating a feedback loop that intensified price action. Related Reading: XRP Liquidity Builds on Binance – What The 2.78B Reserve Spike Means XRP Reclaims $1.50 but Faces Structural Resistance The XRP 3-day chart shows the asset attempting to stabilize after a prolonged downtrend that began in late 2025. XRP is currently trading around $1.51, having recently reclaimed the $1.50 level, which now acts as a key short-term pivot for price direction. The broader structure remains corrective. XRP continues to trade below the 50-, 100-, and 200-period moving averages, all of which are trending downward. The market’s current alignment reflects ongoing pressure as sellers frequently meet price rallies with heavy supply at higher levels. Related Reading: Ethereum Futures Volume Outruns Spot 6-to-1 As Macro Stress Weighs On Crypto However, the recent rebound from the $1.10–$1.20 region is technically significant. That zone marked a capitulation low, supported by a noticeable increase in volume, suggesting strong buyer absorption. Since then, XRP has formed a base between $1.30 and $1.45, gradually building momentum before pushing higher. Reclaiming $1.50 indicates improving sentiment, but the asset now faces immediate resistance near $1.70, followed by a stronger barrier around $2.00, where previous consolidation and moving averages converge. Volume during the recovery remains moderate, signaling that the move is still developing rather than driven by aggressive inflows. Featured image from ChatGPT, chart from TradingView.com

18 Mar 2026, 17:30

Jane Street Is Trading Bitcoin Again: What You Should Know About This Major Player

Bitcoin is once again at the center of attention as a fresh wave of on-chain activity brings one of the most closely watched trading firms back into focus. Recent data shows that Jane Street has resumed moving Bitcoin, drawing renewed attention at a time when scrutiny around its past actions has not fully subsided. On-Chain Bitcoin Data Reveals Coordinated Inflows Recent blockchain tracking data highlights a clear resurgence in activity tied to wallets associated with Jane Street. Within roughly two hours, these wallets received a combined 205.36 BTC, valued at approximately $15.08 million at the time. The inflows originated from two major trading platforms, BitMEX and LMAX Digital . The transaction breakdown shows a coordinated pattern. A 150 BTC transfer worth about $11.01 million moved from a BitMEX hot wallet, followed by 55.33 BTC valued at roughly $4.06 million from LMAX Digital. Additional smaller transfers of 0.02 BTC and 0.01 BTC were also recorded from BitMEX-linked wallets. All funds were directed into a single receiving wallet linked to the firm . The timing and clustering of these transactions point to deliberate execution. Movements from exchange hot wallets into a unified address typically reflect institutional positioning, such as liquidity setup or internal rebalancing . The rapid sequence and scale reinforce the view that this was a coordinated operation, signaling that Jane Street is once again actively engaging with the Bitcoin market. Jane Street And The Terra/LUNA Collapse, Allegations The renewed activity comes as Jane Street remains under scrutiny for its alleged role during the Terra/LUNA collapse in May 2022, one of the most significant failures in crypto market history. The Terra ecosystem, developed by Terraform Labs , revolved around two key tokens: UST, an algorithmic stablecoin designed to maintain a $1 peg, and LUNA, which absorbed volatility to support that peg. In early May 2022, large withdrawals from the Anchor Protocol, where UST deposits were earning high yields, began to destabilize the system. As UST fell below $1, increasing amounts of LUNA were minted to stabilize it, which rapidly diluted LUNA’s value. Within days, UST collapsed far below its peg, and LUNA dropped from over $80 to near zero, wiping out tens of billions in market value. Legal filings allege that Jane Street purchased LUNA at a significant discount—around $0.40 per token—before the collapse, with terms allowing favorable conversion or sale. As the market destabilized, it’s claimed the firm sold parts of its holdings while prices were still above acquisition cost, potentially realizing profits of roughly $1 billion. Jane Street denies wrongdoing, asserting that its actions were standard market-making and trading operations, not insider activity . The controversy continues to influence discussions on institutional behavior in crypto markets. Any renewed activity, such as the recent Bitcoin inflows by Jane Street, draws scrutiny from analysts and investors alike, highlighting the market-moving potential of major players.

18 Mar 2026, 17:30

‘Rich Dad, Poor Dad’ author says ‘pin is near’ on TradFi ‘bubble burst:’ Predicts $750K Bitcoin

Author and personal finance educator Robert Kiyosaki says Bitcoin is going to $750,000, but there's a catch.

18 Mar 2026, 17:27

Kenya Unveils Draft VASP Rules With Stringent Stablecoin Reserve Mandates

Kenya’s National Treasury prepared new VASP regulations and began public consultation. The draft sets licensing, reserve, and transaction fee standards for digital asset activity. Continue Reading: Kenya Unveils Draft VASP Rules With Stringent Stablecoin Reserve Mandates The post Kenya Unveils Draft VASP Rules With Stringent Stablecoin Reserve Mandates appeared first on COINTURK NEWS .

18 Mar 2026, 17:20

Binance Bitcoin Inflow Levels Plunge To Four-Year Low

Bitcoin delivered to Binance has declined to the lowest rolling average in years. Long-term holding and reduced selling pressure are seen in the current on-chain activity. Continue Reading: Binance Bitcoin Inflow Levels Plunge To Four-Year Low The post Binance Bitcoin Inflow Levels Plunge To Four-Year Low appeared first on COINTURK NEWS .