Yesterday’s live stream ended too late, and I was really, really sleepy. I didn’t even have the motivation to interpret the U.S. Federal Reserve FOMC minutes. I downloaded them from the official website first and watched them today.

First, the conclusion: the interest rate will be kept unchanged, and the overall economy is stable. The probability of further rate hikes in the future is very small, but the probability of rate cuts is also not big.

Last night, Worsh expressed the Federal Reserve’s position on independence at a congressional hearing. One point worth noting is that the Fed’s regular standing lending backstop tool for bank liquidity remains unchanged; however, the hearing made it clear: this tool only serves licensed banks and does not cover the crypto market. That means crypto can crash as long as it doesn’t affect traditional finance—the Fed doesn’t care.

Now the U.S. is clearly quite divided. The crypto world is one side: DeFi and stablecoins. On the other side are major traditional financial institutions and the NYSE/Nasdaq, the Visa payment system, banks—using blockchain technology, but on consortium chains. This separates everything from the crypto world. Even if the crypto world has problems, it won’t spill over into traditional finance.

This also helps explain why all the RWA, DeFi, and traditional-finance “positive news” for the crypto market don’t bring a real breakthrough in lifting the corresponding crypto tokens. After all, a narrative-driven rally in the news can’t bring stable upward movement; real underlying inflows are the root.

The U.S.’s previous way of “harvesting” was: rate hikes pull the U.S. dollar back, and then each country can’t handle it, companies go bankrupt one after another, and then when the U.S. cuts rates and floods the market with liquidity, it harvests high-quality global assets. Now that rate-hike-driven dollar inflows have been contained by the East, some countries can’t hold on. So the East gives you low-interest loans and makes the U.S. feel quite uncomfortable. What the U.S. is trying to do now is to go after Iran, control the Strait of Hormuz—based on this posture, it looks like they want to stir up the Red Sea. That would make Europe and Asia extremely uncomfortable, besides the U.S. itself. Turkey is already close to breaking, and Russia is also very annoyed. Oil prices are high, inflation is severe—so companies or countries are bound to collapse. Then the U.S. can harvest.

Previously, when the U.S. and Iran traded blows, the U.S. was a bit timid and signed a shameful memorandum of understanding. Now it looks like they’re just catching their breath. Once Worsh comes to power, Trump starts getting tough—talking about charging for the strait, and even urging Saudi Arabia to fight the Houthis—creating tension in the Red Sea. Even if oil prices rise, they won’t be afraid. Worsh will suppress inflation data, and in the end it will lead to rate cuts. Oil prices have already jumped from around 70 to nearly 90.

How will Worsh support Trump? The answer is reform of the Federal Reserve. Mainly, they will set up five working groups. One of them is related to crypto, and the head of a16z is in it. At the same time, they may modify the previous assessment approach—possibly abandoning the dot plot and carrying out a new set of methods, moving from forward-looking expectations to pre-emptive anticipation and taking measures early.

First working group: the policy communication working group—reviewing the dot plot during the Powell era, forward guidance, the wording used in press conferences, and meeting minutes. They will assess whether overly clear interest-rate expectations distort market pricing and create one-way trading. They start weakening forward guidance and reducing the weight of the dot plot, without giving the market expectations in advance.

Second working group: the balance sheet policy working group—assessing “quasi-equity capital” and whether to expand or shrink the balance sheet.
Decisions made by this group will directly affect the price of Big BTC and U.S. stocks.

Third working group: the inflation framework working group—redefining inflation indicators and re-evaluating how supply-side factors (AI, supply chains, energy, immigration) affect inflation. They will discuss whether the Federal Reserve should focus only on demand-side inflation or also take supply shocks into account.
The inflation target is 2%. Re-evaluate the statistical data—once the statistical definitions change, it’s easy to hit 2%. This is also Trump’s confidence: the fundamental reason they keep going after Iran, ignoring the rise in oil prices and the pressure from inflation.

Fourth working group: the economic data working group—current official statistics like CPI and non-farm payrolls lag behind and are distorted; studying how to introduce real-time commercial big data (retail, business payments, real-time salary data) to support decision-making; and correcting defects in the way inflation and employment statistics are measured.
This is essentially the completion of what the third group does, and it provides strong data support for Trump. Once the data is changed, it looks good—also helpful for expectations of rate cuts.

Fifth working group: the productivity and employment working group—assessing how artificial intelligence changes America’s long-term productivity, wages, inflation, and potential GDP; researching how new technologies, digital assets, and private-sector innovation affect long-term economic growth.
This group involves crypto. Even in terms of liquidity realization, they also acknowledge that the Federal Reserve is starting to pay attention to this area. Marc Andreessen from a16z is in this group, and he will push the Federal Reserve’s regulation of the crypto market toward clearer direction. You can’t miss that the Federal Reserve and Trump are actively staging global tensions and building expectations that liquidity will dry up—preparing for future rate cuts, and then harvesting the world.

What should I do in the crypto market? Wait for various countries to blow up. When the AI bubble gets triggered and the U.S. cuts rates to harvest, we enter to buy the dip, ensuring plenty of cash flow. The reason I mention an AI blow-up is that I don’t really understand AI. I specifically asked BTB research and investment students Sun Peng—he’s a big shot in the internet. Basically he says the input-output ratio doesn’t make sense: they spend hundreds of billions or even thousands of billions on AI, but the output is almost nonexistent. This is completely impossible to sustain long term—which is exactly the reason for the blow-up. This prediction basically matches closely with Trump’s and the Federal Reserve’s moves.

Wait for the time to come.