FOMC Meeting and Future Macroeconomic Outlook

Macroeconomic Situation and Market Environment

The Federal Reserve's FOMC meeting in May kept interest rates unchanged, emphasizing the challenges that tariff policy uncertainty poses to its dual mandate, and adopted a "wait and see" approach. The reduction of the balance sheet continues to slow down, and liquidity needs to pay attention to the debt ceiling and changes in reserves. The Fed Chairman reiterated that the resilience of the economy supports patience, and the timing of interest rate cuts depends on tariff progress and data, with a reassessment planned for the June meeting. It is recommended to pay attention to economic data after the July tariff deferral expires, as a rate cut of 50-100 basis points within the year remains possible.

Capital Flow Analysis

In terms of external capital flows, this week the ETF inflow was $919 million, a decrease in inflow; stablecoins increased issuance by 2.549 billion this period, with an average daily increase of 196 million, at a moderate issuance level. In terms of market sentiment, the premium on stablecoins continues to decline, showing a clear divergence from prices.

Mainstream Coin Market Structure

Bitcoin ( BTC ) is in a fluctuating upward range on the technical side, with the peak of on-chain chip distribution returning to around $93,000. Ethereum ( ETH ) is performing weaker than BTC, and the ETH/BTC ratio has maintained fluctuations before breaking down this week, with funds continuously flowing back to BTC dominance. On-chain data shows an increase in ETH active addresses, which may indicate that a phase of bottoming out has been completed.

Macroeconomic Review

FOMC Meeting Highlights

1. The interest rate remains unchanged, in line with market expectations.
2. The risks of uncertainty in the economic outlook are rising, with both unemployment and inflation risks increasing.
3. The overall economic resilience is strong, but it faces challenges from the uncertainty of tariff policies.
4. Maintain a cautious attitude, future rate cuts may occur but the magnitude and timing will be more prudent.
5. The benchmark interest rate and the balance sheet reduction plan remain unchanged, committing to bringing inflation back to 2%.

Shrinking Table and Liquidity

• The pace of balance sheet reduction has slowed, with the balance sheet size decreasing to $6.71 trillion.
• The Ministry of Finance relies on short-term government bonds for financing, absorbing market liquidity.
• It is recommended to pay attention to the decline in bank reserves from July to August and be wary of the liquidity risk as the Treasury's "X-Day" approaches.

Monetary Policy Attitude

• Inflation slightly above 2%, housing and non-housing services data are good, but the outcome of tariff negotiations is unknown.
• Under economic resilience, the waiting cost is low, and action can be taken quickly once the situation becomes clear.
• The interest rate cut depends on the scale, sustainability, and economic data of tariffs; the path cannot be determined in the short term.

Market and Policy Outlook

• The Federal Reserve maintains policy flexibility and independence
• It is expected that interest rates will be cut by 50-75 basis points within the year, and tariff impacts in the second half may drag down GDP.
• Economic data generally supports a wait-and-see strategy, and attention should be paid to the impact of tariffs in the second half of the year.

On-chain Data Analysis

stablecoin capital flow

The total amount of stablecoins has increased to 210.379 billion, with a single cycle increase of 2.549 billion, the highest in nearly four weeks. The daily average issuance has slightly retreated but remains at a medium level, constituting a medium-term bullish signal and providing liquidity support for risk assets.

ETF capital flow

This week, ETF inflows reached $919 million, far below the high levels of late April, indicating that institutional funds are becoming more cautious. The market is transitioning from a "flow-driven period" to an "expectation game period," and short-term volatility may increase.

OTC Premium

The OTC premium for USDT and USDC continues to decline and has fallen into a submerged range, diverging from the price trend of BTC. This reflects a weakening willingness of funds to enter the market, and caution is needed for potential liquidity withdrawal and price correction pressure.

On-chain chip structure

The first major support level on the BTC chain is around $93,000, and the second major support is around $84,500. The chips are being distributed towards mid-range addresses, and the on-chain structure is tending towards health.

Market Outlook

In the short term, BTC may fluctuate in the range of $100,000 to $104,000. After correcting the 4-hour indicators, it may further rise. Caution is needed for a potential divergence near $104,000 which could trigger a pullback. Overall, the medium-term market structure still favors positive development in the future, but in the short term, one must guard against the potential risk of a top structure forming.