Trump-Putin Call Shakes Markets—Is a Real Ukraine Ceasefire Coming?
Digital Asset Market: Bitcoin (BTC) hovered around its 200-day average of $84,000 after a Hyperliquid whale that had dominated the market for a few days. exited a significant short position, while some analysts questioned the sustainability of its recent bounce. Despite this skepticism, ETF-driven selling pressure appeared to be exhausting, with U.S.-based spot bitcoin ETFs seeing consecutive inflows totaling $275 million on Monday. Analyst Valentin Fournier from BRN suggested that continued inflows could bolster Bitcoin's price. The impending Fed rate decision could introduce volatility, with a dovish stance possibly encouraging risk-taking. Post-FOMC, Bitcoin is projected to trade between $80,000 and $86,000, depending on macroeconomic signals and investor sentiment. Meanwhile, smaller coins like CAKE, TKX, OKB, and ATOM showed positive performances, while the SUI token struggled after a previous surge.
Macro Economics: The OECD has revised its global and U.S. economic growth forecasts downward, citing the impact of proposed trade tariffs by President Donald Trump. Global growth is projected to decline from 3.2% in 2024 to 3.0% in 2026, with U.S. GDP growth expected to slow to 2.2% in 2025 and 1.6% in 2026. The report highlights increased tariffs between the U.S., Canada, and Mexico as significant contributors to this outlook, alongside heightened trade and geopolitical uncertainties. Inflation rates are also anticipated to rise, with U.S. inflation forecasted at 2.8% in 2025, exceeding previous estimates. The OECD emphasizes that reversing tariffs could have a positive impact on global and U.S. growth, advocating for open markets and a cooperative approach to trade issues. The organization warns that sustained trade tensions could hinder economic activity, inflate consumer prices, and disrupt trade systems, urging dialogue and cooperation to resolve these challenges.
Equities: US stocks pulled back on Tuesday, with the Nasdaq Composite falling nearly 2% due to concerns over an economic slowdown, ahead of the Federal Reserve's policy meeting. The decline was led by Nvidia shares dropping 4% prior to its GTC conference in California. The Dow Jones Industrial Average and S&P 500 also fell by approximately 0.5% and 1.1%, respectively. Investors are keenly watching the Fed's two-day policy meeting starting Tuesday, with the Dow and S&P 500 declining by around 0.2% and 0.4%, and the Nasdaq dropping 0.8%. Nvidia's performance is seen as crucial for the market's direction, as its recent struggles have paralleled stock market trends, according to Evercore technical strategist Rich Ross. Nvidia is below key moving averages, signaling lost momentum, which mirrors the S&P 500's 5% decline this year, where Nvidia holds significant weighting.
The Fed and US Treasury: As markets seek recovery from recent sell-offs, the upcoming Federal Reserve policy decision, expected to maintain steady interest rates amid tariff uncertainties and growth concerns, is a critical focus. The simultaneous release of the Fed's Summary of Economic Projections and Chair Jerome Powell's press conference will be pivotal as investors scrutinize potential stagflation signals—growth stagnation coupled with persistent inflation. Stagflation fears have surged, with 71% of participants in a global survey anticipating it. The CNBC Fed Survey revealed a recession risk increase to 36%, driven by worries over Trump administration fiscal policies, especially tariffs, now viewed as the main threat to the U.S. economy. GDP forecasts for 2025 fell sharply, and expectations for two or more rate cuts dominate despite tariff-induced inflation concerns. Nonetheless, tariffs present a significant challenge for the Fed, as Powell faces the dilemma of balancing growth worries with tariff impacts while also contending with the potential effects of reductions in government employment by the Department of Government Efficiency. Overall, trade wars and policy volatility threaten to push a previously strong economy toward recession.
Geopolitical: A recent Trump-Putin call resulted in a limited agreement for Russia and Ukraine to cease attacks on energy infrastructure, though it fell short of a broader U.S.-proposed truce. The agreement marks a small step toward a potential Black Sea ceasefire and full peace deal, but Ukraine remains cautious, with President Zelenskyy insisting on European involvement and security guarantees. Trump’s administration has engaged in behind-the-scenes diplomacy, with special envoy Steve Witkoff visiting Moscow and Secretary of State Marco Rubio speaking with Russian officials. Talks have also included territorial concessions, nuclear power plants, and Ukraine’s stalled NATO ambitions, which U.S. officials acknowledge may be off the table. The U.S. recently resumed intelligence sharing and military aid to Ukraine, reinforcing its support despite diplomatic efforts. Meanwhile, Trump’s team signals a desire to reset U.S.-Russia relations, highlighting potential economic and geopolitical benefits. However, Ukraine remains skeptical, citing Russia’s history of violating ceasefires, and the negotiations leave European security, Ukraine’s sovereignty, and global stability hanging in the balance.
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Bitcoin continues to trade in a narrow range between $80K and $85K, struggling to find a clear breakout. Contrary to expectations, the influx of ETF-driven liquidity has not reduced volatility but instead exacerbated price swings. Moreover, rather than fostering Bitcoin’s independence from traditional financial markets, ETF flows have deepened its correlation with equities, making it more susceptible to macroeconomic trends. As institutional adoption grows, Bitcoin's role as a risk asset continues to evolve, with broader market forces playing an increasingly significant role in its price action.
Markets are turning their attention to today's FOMC decision, though the real focus lies in the meeting minutes, which could offer insight into the Fed's future policy stance. With a 99% probability that rates remain unchanged, traders are instead looking ahead to three expected rate cuts later this year. The Fed faces a delicate balance: managing inflation while addressing recessionary risks and the Treasury’s pressing need to refinance $7 trillion in U.S. debt. With global instability mounting, policymakers may find themselves forced to ease monetary conditions sooner than expected, potentially influencing risk assets like Bitcoin.
Meanwhile, the Trump-Putin call has introduced a potential ceasefire around energy infrastructure in the ongoing Russia-Ukraine war, a development that could carry greater geopolitical weight than the FOMC meeting. While the agreement represents a step toward de-escalation, Ukraine remains cautious, demanding stronger guarantees and European involvement. If the ceasefire holds, it could stabilize global energy markets and shift investor sentiment across FX, commodities, and crypto. However, given Russia’s history of violating ceasefires, markets remain wary of whether this agreement will translate into lasting peace or renewed conflict.
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