The Federal Reserve's first meeting of 2025 is expected to have little impact on the cryptocurrency market, as policymakers are likely to hold interest rates steady and maintain the hawkish forward guidance from December. However, Federal Reserve Chairman Jerome Powell may face questions on key issues that could potentially move markets. One such issue is the potential impact of President Donald Trump's deportation of illegal immigrants on the labor market and inflation. The disappearance of up to 1 million potential workers could tighten the labor supply and contribute to inflation, potentially reducing expectations for rate cuts and leading to a decline in risk assets. Another issue is the US reaching its debt ceiling and the Treasury implementing extraordinary measures to keep the government functioning. Powell may be asked about the effects of these measures on liquidity conditions and risk-taking in the economy and markets. Lastly, a moderation in shelter inflation, as indicated by leading indicators, could lead to a surge in risk assets if Powell acknowledges this disinflationary trend.



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