Finance News
By Julie Binoche
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Mortgage Rates Stuck, Homebuyers Squeezed. The housing market is probably the clearest place where the Fed's diminished power shows up in…
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Balance Sheet Expansion Returns, Crypto Caught in the Crossfire. The Fed's balance sheet shrank by $2.2 trillion over the past few years through quantitative…
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The Federal Reserve is losing its grip. Despite cutting short-term rates, long-term borrowing costs keep climbing — and the bond market basically isn't listening anymore.
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Jerome Powell's Fed only directly controls the federal funds rate, which governs overnight lending between banks. That's it.
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The break started with the pandemic spending surge and it hasn't healed.
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The federal debt now sits at $37.6 trillion. In fiscal year 2025 alone, the Treasury issued $30.2 trillion in marketable securities.
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The housing market is probably the clearest place where the Fed's diminished power shows up in everyday life. Throughout 2024, the 30-year fixed mortgage rate stayed between 6.
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That's a pretty brutal outcome for anyone who waited on rate cuts to buy a home.
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And it's not just homebuyers getting squeezed. The federal government itself faces a massive refinancing crunch. Some $9.1 trillion in securities mature in 2025.
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Read also: Digital Chamber Pushes Senate Hard on CLARITY Act with Growing Crypto Coalition Behind It
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The Fed's balance sheet shrank by $2.2 trillion over the past few years through quantitative tightening. But that process has reversed.
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What does that mean for crypto? Quite a bit, actually. Bitcoin and the broader crypto market have grown increasingly sensitive to Treasury supply dynamics and Fed liquidity…
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And the rate outlook isn't helping sentiment either. Bond traders are pricing in a Fed rate hike by the end of 2026 — a sharp reversal from earlier expectations of continued cuts.
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The Fed's position is genuinely awkward right now. Hiking rates would expose how fragile the fiscal situation already is.
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Related: Coinbase Becomes First U.S. Exchange to Win Global Perps Approval
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