Tensions in US Monetary Policy
Weekly Update: This week’s biggest stir came from US President Donald Trump, who openly attacked Federal Reserve Chairman Jerome Powell. Trump declared that Powell is “slow and wrong,” saying his removal “can’t come soon enough.” The public statement rattled markets, and the Fed.
In a clear shift after Trump’s comments, Mary Daly, President of the San Francisco Fed, expressed support for cutting interest rates twice in 2025, emphasizing the need for gradual reductions. This was a sharp contrast to Powell’s earlier remarks, where he said the Fed should “wait and watch” the effects of tariffs, which he admitted were more damaging than expected.
Meanwhile, US Treasury Secretary Scott Bessent warned that removing Powell could “shake markets” and urged stability. On Polymarket, bets that the Fed would hold rates steady in May jumped from 62% to 88%.
It’s now clear: political pressure is reshaping monetary narratives, even if Fed officials claim independence.
Trade Wars & Global Realignments
Trade tensions hit a boiling point. The US and China locked horns once again:
- China mocked Trump’s tariff policies on social media.
- Beijing stopped all LNG imports from the US
- In response, the US raised tariffs on Chinese goods to 245%.
- China ordered its airlines to stop accepting Boeing deliveries and quietly sold 15,000 BTC (~1.25B USDT) to support local budgets.
Meanwhile, Trump teased a “very good” upcoming trade deal with China, despite the chaos. He also met with Italy’s PM Giorgia Meloni and confirmed upcoming talks with Japan about military spending and tariffs.
In Asia, South Korea and Vietnam announced closer trade ties, clearly preparing for a shift away from US-centric trade routes. Europe, on the other hand, hinted at retaliatory measures if US trade negotiations continue to stall. California Governor Gavin Newsom even filed a legal challenge to Trump’s tariffs, calling them “illegal.”
Markets React: Between Panic and Correction
The S&P 500 dipped after the EU confirmed tariffs would remain in place. Retail sales in March surprised on the upside at +1.4%, signaling resilience, but behind the scenes, stress is mounting:
- US saw the highest number of major corporate bankruptcies since 2010.
- Gold broke above $3,300/oz for the first time in history.
- The VIX (volatility index) rose but without panic, analysts called it a “controlled correction.”
Even as Powell warned about tariff effects, Bank of America declared “no recession in 2025,” though they expected no rate cuts either. Conflicting signals are the new norm.
US Domestic Confidence at Risk
Data on American consumer sentiment revealed deep pessimism. Most low-income households now believe there’s only an 18% chance their real income will grow over the next 5 years, down from 36% five years ago. The middle class doesn’t feel much better.
Trump offered a bold proposal: scrap income tax and fund the government using tariffs. This may appeal to frustrated Americans but economists remain skeptical.
Mantra (OM) Collapse: The Anatomy of a Rug
The crypto world saw one of its most dramatic crashes in recent memory. Mantra (OM) nosedived 90% in an hour, wiping over 5.5B USDT in market cap. Here’s what happened:
- A wallet linked to the team deposited 3.9M OM on OKX, sparking panic.
- The team controls ~90% of supply, raising centralization concerns.
- Rumors of secret OTC deals surfaced, offering tokens at far below market price.
- A wave of liquidations, stop-losses, and panic selling triggered a full collapse.
Binance confirmed that tokenomics changes and cross-exchange volatility caused the crash. The CEO of Mantra blamed exchanges for manipulating price during low liquidity.
The real lesson? Avoid tokens with concentrated supply, unclear tokenomics, and delayed promises. Many investors were blindsided.
Stablecoins Surpass Visa in Volume
A quiet but massive milestone: for the first time ever, the total volume of stablecoin transactions exceeded Visa’s global payment volume.
This signals how far decentralized finance (DeFi) has come. Despite legal challenges and delays in ETF approvals, on-chain finance continues to grow faster than most expected.
Bitcoin & Institutional Moves
Institutions aren’t slowing down:
- MicroStrategy bought 3,459 BTC for $285.8M.
- Metaplanet added 319 BTC to its treasury.
- Babylon unstaked 14,929 BTC (~1.26B USDT).
- BlackRock kept buying while most other ETFs were selling.
- Rumors spread that the US might start buying Bitcoin using tariff revenue, though it remains unconfirmed.
Ark Invest reported Bitcoin’s volatility is now at historic lows. The accumulation trend points toward long-term confidence, not speculation.
Regulatory Winds Shift
Big shift at the SEC: 10 major crypto cases were dropped this quarter, including those against Coinbase, Uniswap, and Ripple. With Gary Gensler gone, there’s a softening in tone, and a surge in ETF filings.
Canada approved Solana Spot ETFs, and VanEck is launching a crypto ETF (NODE) on May 14 focused on digital economy companies.
At the same time, the SEC delayed a decision on staking inside Grayscale’s ETH ETF, signaling continued caution around crypto yield mechanisms.
Ethereum & Solana: Contrasting Stories
Ethereum gas fees dropped to 0.168 USDT, the lowest in 5 years. Great for users, but it also raises questions about activity on the network.
Solana, on the other hand, is booming:
- 293.7B USDT in Q1 DEX volume (39.6% of the market)
- 819M USDT in revenue, more than all L1s and L2s combined
- Liquidity is flowing steadily into Solana DeFi platforms
Raydium even launched a new LaunchLab to compete with PumpFun, pushing RAY token up 8%.
Meme Coin Drama & Exchange Distance
Coinbase had to publicly deny involvement in a failed meme coin launched on Base. The project collapsed after losing 15M USDT in investor funds. Coinbase clarified that Base is a permissionless chain and it doesn’t endorse projects.
It was a reminder: open platforms don’t mean every project is safe.
Bills, Laws, and Proposals
- Oklahoma’s Bitcoin reserve bill failed to pass committee.
- Trump floated a ban on stock trading by Congress members.
- Senator Josh Hawley will reintroduce his anti-stock-trading bill.
Closing Thoughts
This week wasn’t just about price charts or isolated tweets. It was about power, who has it, who’s losing it, and who’s quietly accumulating it. From Trump’s verbal assault on Powell to China’s quiet Bitcoin selloff and Solana’s noisy dominance, every event echoed something deeper: uncertainty is the new constant.
As always, this article is for informational purposes only and does not constitute financial advice. Always do your own research (DYOR) before making investment decisions. The line between risk and opportunity is thin, and this week proved just how fast things can flip.
To explore how to trade major market moves with low fees and full control, check out Millionero Spot and Perpetuals market. For more insights like this, visit our blog.