2026-01-16 05:50:18

The Federal Reserve policy turning point is emerging, and the hawkish camp is actually expanding

Recently, the confrontation between U.S. politics and monetary policy has escalated. The investigation into the Federal Reserve Chair by the judiciary was initially interpreted by the market as a signal of easing monetary policy, but the actual outcome is quite the opposite—more and more investors and market analysts predict that this event will instead strengthen the Fed's hawkish stance.

Data speaks volumes. According to Polymarket's prediction market data, the probability of the Fed Chair's resignation by mid-year has sharply decreased from 74% to 45%, and the likelihood of resignation before the end of the year has also dropped from 85% to 62%. This indicates that the market is adjusting its expectations for leadership change at the Fed. Meanwhile, the call for hawkish candidates is rising, while the chances of candidates previously seen as political allies taking over have significantly declined.

Why is this happening? The underlying logic is worth pondering. The core dilemma faced by the Fed is: if it eases policy easily due to external political pressure, the risk of a resurgence in inflation will directly undermine the Fed's institutional credibility. Analysts point out that the cost of maintaining independence is far lower than the price of losing market confidence. This drives the Fed management to more likely stick to hawkish positions to demonstrate the scientific basis of their decisions rather than political considerations.

History often intersects politics and economics. This confrontation has broken a certain implicit balance, resulting in the Fed actually reinforcing its confrontational policy stance. For traders concerned with assets like $BTC, $ETH, $XRP, this means that the liquidity environment may continue to be under pressure in the short term, and the uncertainty in long-term inflation expectations management also increases.

BTC-0,35%

ETH0,14%

XRP-0,71%

View Original

This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.

26 Likes

Reward
26
10
Repost
Share

Comment

0/400

RugPullSurvivor

· 01-18 19:33

Ha, another reverse operation? Political pressure has only made the hawks more hawkish. I've seen this trick too many times. Basically, it's about maintaining independence. They'd rather stubbornly hold on than be exposed; otherwise, their credibility collapses completely. This is not good news for the crypto world. Liquidity continues to be locked, so in the short term, we still need to play defense, everyone.

View OriginalReply0

DYORMaster

· 01-18 15:13

Political pressure actually makes hawkish policies more rigid, isn't that ironic? The crypto world is going to have a tough time, liquidity continues to tighten. This is about proving oneself not to be politically hijacked, but in the end, everyone gets caught up. The Federal Reserve's psychological tactics are only now being gradually understood by the market. So do we still have to endure? Tight liquidity is truly a setback. The drastic changes in Polymarket data indicate a major reversal in market expectations. The rise of hawkish candidates means what? It just makes rate cuts more difficult, and this wave of crypto is hanging in the balance. Political struggles have actually strengthened institutional independence, which feels a bit impressive. Short-term continued pressure, this just means more decline, just listen to it. Rising uncertainty in inflation expectation management... Basically, no one knows what will happen.

View OriginalReply0

TokenomicsPolice

· 01-18 08:04

Wait, the Department of Justice investigation actually made the hawks more aggressive? That logic is really brilliant, political backlash. --- No, this move backfired for sure. The Federal Reserve is also incredible; the more pressure there is, the more tough their stance becomes. --- Watching a good show, liquidity continues to be locked up, and BTC and ETH are going to suffer again for a while. --- To maintain independence, you have to pretend to be tough. I told you it wouldn't be so easy to loosen the grip. --- So, meddling in the Federal Reserve by political forces ultimately backfired, turning into a self-inflicted blow. --- The prediction market dropped from 85% directly to 62%, the market really didn't see that coming, missed out. --- The rising hawkish voices mean one thing: it might get even more aggressive than now. In the short term, liquidity is not going anywhere.

View OriginalReply0

OldLeekConfession

· 01-17 09:40

Wait a minute... The Department of Justice wants to target the Federal Reserve Chair, but it actually makes the hawkish stance even tougher? That logic is incredible. This is a operational mistake. They originally wanted to loosen policy but ended up getting a slap in the face. Short-term liquidity continues to be locked up, and our $BTC and $ETH still have to eat dirt... Clever. Politicians trying to intervene in monetary policy, but it actually strengthened the hawkish stance, truly shooting themselves in the foot. Polymarket's data doesn't lie; this time, the Chair should be safe. Those political allies and candidates can take a break. This is the power of independence, just stand firm... But our wallets will continue to be suppressed.

View OriginalReply0

CrossChainMessenger

· 01-16 06:20

Tsk, using this political tactic again is backfiring. Oh my, this is awkward. Trying to pressure only makes them more resistant. Liquidity continues to dry up. My coins are still in the red.

View OriginalReply0

GasFeeLover

· 01-16 06:20

Basically, it's political backlash. Hawks are getting more arrogant. --- So the crypto circle still has to keep a low profile. Liquidity is about to be squeezed dry. --- That move was brilliant. Instead of soft pressure, it became hard. The Federal Reserve is really ruthless. --- $BTC faces enormous pressure. In the short term, there doesn't seem to be any good news. --- Maintaining independence sounds nice, but it's actually just mutual finger-pointing. --- Mid-year 74%, now 45%. This data drop is unbelievable. --- Hawkish candidates coming up are even more extreme. How can the crypto prices survive? --- Inflation expectations are about to be disrupted again. So annoying.

View OriginalReply0

DegenTherapist

· 01-16 06:14

Damn, political intervention actually pushed the hawks even harder? This reversal is really absolute. --- It's the same old story, the more pressure politicians put, the more the Federal Reserve hardens, very ironic. --- Wait, with Polymarket data dropping like this, is it betting that the Fed Chair will stay on? --- Haha, I knew it. Want to undermine the Fed's independence, but end up giving them a stronger excuse to be stubborn. --- Short-term liquidity continues to be pressured, and contracts are going to get wiped out again. --- The logic is actually very clear: if you’re timid, you’re doomed, so just be more aggressive to maintain credibility. --- $BTC, what are you waiting for? It’s still tough in this environment. --- Political attempts to intervene backfire, ending up shooting themselves in the foot, now even more hawkish, haha. --- The Fed’s move was clever, countering those trying to exert pressure. --- Uncertainty in inflation expectation management is rising, and that’s the real trouble.

View OriginalReply0

GateUser-5854de8b

· 01-16 06:14

Damn, is this a reverse operation? Political pressure actually made the Federal Reserve more hawkish? --- The crypto world is about to get hit again. The hawkish stance means continued bloodsucking, no short-term salvation. --- I can't quite understand why political pressure actually strengthened the hawkish position. What's the logic here? --- Polymarket data is the real deal. Lambo still needs to wait a bit longer. --- Liquidity continues to be drained. This summer, just hold on and be patient, everyone. --- The Federal Reserve would rather be criticized than print money. Their independence is just that strong. --- So $BTC$ETH$XRP all have to be locked up. This political game never ends. --- The probability of resignation dropped from 74% to 45%. That means the chair is secure, still hawkish. --- Uncertainty in inflation expectation management is rising... this is probably the most annoying part.

View OriginalReply0

GasWaster

· 01-16 06:08

Now the Federal Reserve is really going to stand up to politicians. The more pressure they face, the more hawkish they become. It's hilarious. --- So political interference with the Federal Reserve is basically a reverse operation? Assets that should fall still need to fall. --- Looking at Polymarket data, the probability of resignation has dropped from 74% to 45%. That turnaround is quite wild. --- Wait, the resignation probability is so low now? Then the likelihood of the Fed continuing to tighten is indeed increasing. --- To maintain independence, they’d rather have a hard landing. I just want to ask investors, how do you feel right now? Satisfied? --- Short-term liquidity continues to be squeezed, and my positions might be swept repeatedly. Speechless. --- Uncertainty around inflation expectations continues to rise, and that’s the real hidden danger. --- In simple terms, the more politicians pressure the Federal Reserve, the more it has to show independence, shooting itself in the foot. --- BTC and ETH really can't hold up in this environment; liquidity pressure continues.

View OriginalReply0

BearMarketSurvivor

· 01-16 05:50

Wait a minute, the greater the political pressure, the more hawkish the Federal Reserve? That logic is a bit absurd. What should we do about BTC and ETH? Liquidity still needs to be hammered down. Where's the promised liquidity easing? Instead, they slap us with a backhand. Polymarket data is speaking, with the probability of resignation dropping from 74% to 45%... This is really going to be a hard stance. Maintaining independence sounds lofty, but for us traders, it's a nightmare. It seems like we still have to endure next year. This political confrontation makes the market very uncomfortable. People thought the Department of Justice investigation was bearish, but it turned out to be the opposite—an example of economic counterintuitive logic. Is there still so much uncertainty about inflation expectations? Then, we really shouldn't be too bullish in the short term. History is often so ironic: political intervention actually makes monetary policy more aggressive, and we are forced to adapt. This time, hawkish candidates are coming to power. Asset holders still need to stay calm this year.

View OriginalReply0