On April 14, 2026, U.S. Treasury Secretary Scott Bessent publicly commented on the Federal Reserve's interest rate cuts and tariff policies: on one hand, he acknowledged that "the Federal Reserve does indeed need to cut rates, but can observe for a while longer," while on the other hand, he confirmed that the 10% tariff implemented under Section 122 has taken effect, and whether it will be further raised to 15% is still undecided. This statement came at a time when the market had already bet on the future interest rate cuts over the next two years, highlighting a clear dissonance with the Federal Reserve's own position of entering a wait-and-see phase. More critically, Bessent tied the pace of monetary policy to the arrival of the new chairman nominee Kevin Warsh, while also pushing tariffs—an archetypical trade tool—to the forefront, essentially creating a new battleground among fiscal, monetary, and trade policies. For global capital and crypto assets, the uncertainty surrounding personnel and tariffs is not merely macro news but the starting point for reshaping funding flows, risk appetite, and valuation frameworks in the coming months: when "the need for rate cuts" and "let's wait a bit longer" coexist, which narrative should the market embrace?

Pause on Rate Cuts: Treasury to...

In his speech on April 14, Bessent provided a rare reference to rate guidance from the Treasury Department with the phrase "the Federal Reserve does indeed need to cut rates, but can observe for a while longer". The first half of the sentence confirms that inflation has eased and the economic environment has opened up space for loosening, while the second half emphasizes that there is no urgency to act immediately, signaling: policy direction aligns with monetary easing, but in terms of execution timing, caution and delay are advocated. For a Treasury Secretary who should maintain distance, this public "commentary" on the Federal Reserve somewhat crosses traditional boundaries of restraint.

This statement touches on the delicate balance of Federal Reserve independence and market expectations. On one hand, the Treasury Department did not directly intervene in rate decisions, but by using the phrase "let's observe," they provided political leverage to the position of caution against rushing to cut rates; on the other hand, the market had already priced in multiple rate cuts over the next two years, and hearing the Treasury Department advise caution inevitably prompts a re-evaluation of previous bets. Bessent effectively provided a macro narrative shell for "delaying rate cuts": he does not deny the need for cuts but shifts the risk to the "observation period."

In contrast to Bessent, former White House economic advisor Kevin Hassett emphasized "the Federal Reserve still has room to cut rates". This statement acknowledges that there is room for rate reduction but does not address the questions of "when" and "how many times". Various scenarios regarding whether 2026 will witness a full year without rate cuts have already emerged in the market, including specific figures and models for the "probability of no rate cuts for the entire year," but such numbers are still marked as unverified information, with sources and calculation methods not fully transparent, and cannot be used as established facts. The true expectation game occurs in this gray area of "direction is set, timing is uncertain": traders are betting on an earlier pivot at the curve's front end, while official discourse keeps reminding of "patience" and "not ruling out a longer observation period."

Warsh's Appointment Imminent: Hawkish-Dovish Stance and...

In the same instance, Bessent suggested to wait until the Federal Reserve chair nominee Warsh is in place before taking action, thereby directly linking the next steps in interest rate decision-making to personnel installation. This statement not only conveys respect for the current team but also tells the market that the policy timing in the coming months may be re-priced based on the new chairman's preferences. The shift of monetary policy from "rule-driven" to "personality-sensitive" will significantly amplify the attention to individual style, past statements, and asset holdings.

According to public reports, Kevin Warsh has been nominated as the next Federal Reserve chairman and is currently going through the hearing and confirmation process, with specific dates and procedural milestones publicly marked as missing details, making it impossible to predict a timeline accurately. This process-related uncertainty, coupled with Bessent's advice to "wait for his appointment," complicates the market's ability to place definitive bets on upcoming FOMC meetings: not knowing when the new chair will officially take office nor how quickly they will push their rate perspectives thereafter.

Even more concerning for the crypto market is that research briefs indicate Warsh holds investments in crypto infrastructure projects, a fact disclosed by media including Eleanor Terrett. While this does not automatically mean he will "endorse" digital assets, it at least demonstrates his direct interest and understanding of the underlying business models and technologies in this field. For crypto firms, this could mean that regulators will be more familiar with industry realities regarding payment systems, custody, clearing, and market structures, rather than viewing risks solely through a traditional banking lens.

Once Warsh takes office, his persona will become a key variable for the market's re-evaluation of interest rate paths, regulatory environments, and risk asset valuation frameworks. If he takes an open attitude towards rate cuts while inflation is still not back within the target range, the long end of the curve may quickly re-price; if he adopts a "cautiously open" regulatory stance on crypto financial infrastructure, the licensing environment and compliance pathways within the U.S. could also be rewritten. Conversely, if he leans towards a hardline approach early in his tenure to demonstrate "hawkish credibility," risk assets including crypto assets may pay the price for a longer duration of high rates and a high regulatory premium.

10% Tariff Implementation Continuation:...

Outside of monetary policy, Bessent also confirmed that the 10% tariff implemented under Section 122 has been enforced, while whether to further raise the rate to 15% is still undecided. This means that the first step in trade policy has been taken, but the second step remains deliberately vague, leaving room for future negotiations and contests. As the research briefs clearly state, the specific timing of the 10% tariff's implementation and any phased arrangements are still missing details, we can only confirm the status of "effectively implemented" without being able to provide a more detailed timeline.

Tariffs are essentially a form of taxation that is externally levied but internally passed on, which, in the short term, will elevate the marginal cost of U.S. imports. Given the difficulty of quickly reconstructing supply chains, there is a risk of inflationary pressure returning. This creates intrinsic tension with Bessent's assessment of "the need for rate cuts": on one hand, using trade tools to raise prices, while on the other hand, hoping that monetary policy can release easing without triggering another round of inflation, which significantly tests timing in operational levels. If the Federal Reserve rushes to cut rates before the effects of tariffs are fully reflected, it may not contain second-round inflation expectations; if they wait indefinitely, they may be blamed for stunting growth and employment.

From the perspective of cross-border capital flows, tariff escalations will force companies to reassess their production and settlement pathways. Manufacturing and supply chain companies are likely to expedite their relocation to markets with lower tariffs or more predictable policies, and financial capital will also shift from the real channels plagued by policy uncertainty to more flexible asset classes. For example, some capital may move from traditional equities and bonds to focus on theme assets that are less sensitive to the policies of a single country or to multi-country allocations. A natural extension here is the increased attention on crypto assets as a cross-border value transfer and asset diversification tool.

In the medium to long term, if the 10% tariff becomes the new norm and the potential hike to 15% remains suspended above negotiations, businesses and high-net-worth capital will place more importance on retractability and neutrality in their cross-border allocations. On-chain assets and related infrastructure provide a supplemental channel that does not completely rely on banks and traditional clearing systems. Within the regulatory framework, this characteristic may be further financialized into alternatives for cross-border settlement, trade financing, and hedging allocations.

Europe Stays Put: Global Interest Rate Differentials...

In contrast to the U.S. situation of "needing to cut rates but holding back," ECB President Lagarde emphasized in a recent statement that "the ECB has no inclination to tighten policy". The focus of this statement is not on immediate easing but on clearly denying the option for "further tightening," signaling to the market a posture of "staying at a high level rather than escalating further." Thus, across the Atlantic, a subtle misalignment emerges: the U.S. is reminded by the Treasury Secretary to "observe first," while Europe is informed by the central bank governor that "there will not be tightening."

This policy misalignment directly points to interest rate differentials and exchange rates. If the market gradually accepts the narrative that "the Fed will cut rates in the future but will delay the starting point," while thinking that Europe will simply maintain the status quo, the interest differential and expected differentials between the dollar and the euro will widen in terms of trajectory rather than absolute levels. For global asset allocators, this relates to the relative attractiveness of dollar assets: on one hand, the U.S. has deeper and broader markets and liquidity, while on the other hand, as the starting point for rate cuts is continuously pushed back, the interest compensation and opportunity cost of holding dollar-denominated assets will also need to be reassessed.

On a larger scale, geopolitical tensions and the dynamics of sanctions are reshaping the global capital rebalancing among U.S. stocks, U.S. bonds, commodities, and crypto assets. Research briefs mentioned that the general licenses arrangement against Russia shows that U.S. sanction policies remain in a state of dynamic adjustment, while the situation in the Middle East and the blockade of Iranian ports also remain in a high sensitivity zone. Every tweak to sanction rules alters the settlement channels and financing options for certain countries and companies, forcing them to look for redundant paths both within and outside the dollar system.

In this environment, the demand for safe havens and the uncertainty premium surrounding regulations are amplified simultaneously: on one hand, investors still view U.S. Treasury bonds and core stock indices as safe havens; on the other hand, some entities, due to compliance with sanctions and considerations of asset safety, are beginning to consciously build asset pools that are relatively independent of traditional dollar clearing. The role that crypto assets play is not merely as "high-volatility speculative products," but rather as an external channel backup entangled with geopolitics and compliance boundaries.

Crypto Market in Policy Watchful Wait:...

When we intertwine the delayed rate cuts, unclear tariffs, and geopolitical risks, it becomes foreseeable that the volatility of traditional assets is structurally amplified. The interest rate curve oscillates under the tug-of-war of "not cutting but expected to cut," the stock market swings between earnings expectations and discount rates, while commodities repeatedly test the waters amid geopolitical events and policy expectations. However, for the crypto market, this macro noise is not a distant background, but rather directly permeates the price and structural rotations through liquidity and risk appetite.

In an environment with restricted cross-border capital and heightened settlement costs, crypto assets inherently possess dual attributes of alternative channels and high-beta risk assets. For enterprises or investment institutions seeking redundancy in cross-border settlement, on-chain assets and related infrastructure offer a technical solution that does not fully depend on a single sovereign system; for yield-chasing capital, crypto assets serve as amplifiers of "macro liquidity expectations": each adjustment to the rate cut timetable and every reimagining of the tariff and sanction paths will manifest as exaggerated fluctuations in cryptocurrency prices.

Moreover, if we consider Warsh's background in crypto infrastructure holdings and the potential evolution of attitudes in the fiscal and monetary departments, the future regulatory stance towards the industry in the United States may also exhibit subtle yet important changes. A new chair, who has direct exposure to on-chain technology and market structure, may adopt a more specialized perspective on issues such as payments, custody, and market manipulation rather than a one-size-fits-all approach; fiscal and regulatory agencies will need to find new balance points between "risk prevention" and "retaining innovation space." Any shift in this balance is likely to be quickly magnified by the market into narratives of "regulatory positivity" or "policy suppression."

For market participants, in such a macro and policy watchful wait period, the strategic focus should not solely fixate on short-term price volatility. A more reasonable approach is to focus attention on several key rhythms: the timeline for the Federal Reserve personnel resolution, the tone of Warsh's first few public speeches after taking office; whether tariffs will be pushed from 10% to higher levels or remain at current levels for the long term; and whether the geopolitical situation and sanction rules will show directional shifts. These variables not only determine the broad trends of funds flowing in and out of U.S. assets but also shape the next main storyline in the crypto market—whether it will be a showcase for "compliant financial infrastructure" or a replication of "capital outflow and risk-averse sentiment."

From "let's observe for a while longer"...

Reflecting on Bessent's phrase "let's observe for a while longer" provides a view of the cautious and hesitant interplay and testing among fiscal, monetary, and trade policies: the Treasury pushes for the implementation of the 10% tariff under Section 122 while reminding that monetary policy should not rush to cut rates; the cost and inflation pressures created by trade tools, in turn, restrict the Federal Reserve's easing space; at the same time, tariffs and sanction frameworks serve geopolitical purposes, impacting the global allocation of real and financial capital. Each line makes sense individually, but when intertwined, "delay" itself becomes a new policy option.

In the coming months, the resolution of Federal Reserve personnel, the trajectory of tariffs, and geopolitical risks will undoubtedly be the most critical macro variables. Whether Warsh can smoothly pass the hearings and confirmations and when he will officially take office still has information gaps; the 10% tariff has been implemented, but the pace and manner for the 15% increase have not been clarified; sanctions related to the Middle East and Russia are also continuously adjusting details through mechanisms like general licenses. Research briefs clearly indicate that the specific figures regarding "the probability of no rate cuts for the entire year of 2026," the precise dates of hearings, and phased arrangements for tariffs are all unverified or missing information, which should not be treated as established facts in decision-making and judgments.

In this phase where uncertainty is systematically elevated, the crypto market often experiences more violent fluctuations, but it also harbors structural opportunities: some sectors that directly benefit from regulation and institutional entry may gain valuation premiums when regulatory temperatures rise; others that closely align with cross-border settlement and asset migration demands may gain excessive attention under the amplified narratives of tariffs and sanctions. What truly requires vigilance is not the fluctuations themselves but the excessive trust in any single timetable or probabilistic figure—in the moment Bessent "hit the brakes," the market may need to learn to construct its strategies and rhythms amid incomplete information.

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