Boston Federal Reserve President Susan Collins warned on the 'Big Take' podcast that interest rates will remain elevated due to energy shocks from the Iran conflict. Collins stated inflation is stubbornly above the Fed's 2% target, with disruptions potentially tripling inflation estimates compared to 30 days ago. Fed Chair Jerome Powell echoed these concerns, reinforcing a cautious stance.
Bitcoin climbed 2.6% to $80,139 on May 4 as stagflation risks were priced in. Analysts predict a possible 25-30% drop in BTC if inflation escalates, potentially pushing Bitcoin to the low $56K to $60K range. During the 2022 tightening cycle, BTC fell from $69K to below $16K.
In early May, the US Treasury seized $500 million in crypto assets linked to Iran's Islamic Revolutionary Guard Corps, contributing to a 60-70% devaluation of Iran's currency. Despite these pressures, global markets remain resilient, supported by strong corporate earnings and AI momentum. AI-driven crypto segments may benefit, while major tokens face headwinds from higher-for-longer rates.