The US Federal Reserve has been “too tough” in controlling inflation, said pro-Bitcoin (BTC) Tesla and Twitter CEO Elon Musk.
in a debate on twitter On March 29, Musk directly criticized US macroeconomic policy, including “excessive government spending.”
Musk: Fed policy is a “serious problem”
The Bitcoin and crypto markets remain extremely sensitive to signals from the Fed on interest rate policy.
Even as inflation is gradually coming down, the Fed has kept raising rates even as banks feel the pinch and several collapses.
For Musk, this is already a case of going too far: With contagion from the banking crisis spreading to Europe, the US dollar, he agrees, is rapidly losing appeal.
Responding to a thread about dollar supremacy from Genevieve Roch-Decter, chief executive of financial insights firm Grit Capital, Musk did not mince words.
“Serious problem,” he wrote about the possibility of the dollar losing its status as the world’s reserve currency.
“American policy has been too harsh, which has made countries want to get rid of the dollar.”
His words come as several countries enact a move away from US dollar trade, with a focus on China, which has begun transacting in yuan with foreign partners.
TO more tweet de Musk added that the problem was made worse by the Fed, “Combined with excessive government spending, forcing other countries to absorb a significant part of our inflation.”
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The markets remain divided on how the Fed will act in the future. With the next rate hike decision not due for another month, bets are almost equally in favor of another 25 basis point hike and a pause, according to CME Group data. FedWatch Tool.
Fed fuels hyper-bullish BTC price bets
Some believe that given the severity of the banking crisis, the United States will have no choice but to reverse its policy.
Related: Bitcoin Rises Above $29K As ‘Fake’ Fuels Doubts Over BTC Price Strength
Among the most vocal is Arthur Hayes, former CEO of crypto exchange BitMEX, who earlier this month published a dedicated roadmap covering how he thinks events will play out.
In one of several recent tweetsAs a result, Hayes doubled down on Bitcoin’s promising future, giving a $1 million price target.
Meanwhile, amid regulatory attention for fellow exchange Binance, he described BTC price action in 2023 as a “FUD-driven bull market”.
BTC/USD was trading around $28,300 as of this writing on March 30, according to data from Cointelegraph Markets Pro and TradingView.
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