Fed Defies White House as Rates Hike Looms and Crypto Bill Stalls

The Federal Reserve is set to raise interest rates despite pressure from the White House. The hike, expected by 92% of investors, comes as President Trump continues to advocate for low interest rates. In a recent statement, Trump reiterated his belief that the US should have 'the lowest interest rate in the world.'

The decision marks a significant divergence between the Fed and the White House, with some analysts suggesting that the central bank is prioritizing its fight against inflation over political pressure.

In related news, the Senate has voted down the Clarity Act, a bill aimed at establishing a framework for cryptocurrency oversight. The move dealt a major blow to the crypto industry, with prices falling sharply and Coinbase and Circle coming under heavy selling. CoinGlass reported that $571 million was wiped off long positions in the overnight sell-off.

The AI industry is also sounding alarm bells about the pace of model development, but not everyone agrees on what needs to be done. Nvidia's Jensen Huang has contradicted his peers at Anthropic, OpenAI, and xAI, stating that 'we don't need new laws, we have plenty of laws.'

Meanwhile, a CNBC survey predicts that the Bank of Japan will raise interest rates by 25 basis points to 1.25% at its Friday meeting.