Acting Labor Secretary Sandlin’s push for earlier Fed cuts clashes with a cautious central bank, leaving crypto trading a “higher for longer” regime even as the political drumbeat for easing grows louder.
Summary
- Acting US Labor Secretary Sandlin has said the Federal Reserve “should consider lowering interest rates,” putting a senior Biden administration official on the side of earlier easing even as Fed leadership signals patience.
- The comments land against a backdrop of strong jobs and growth data that have already pushed market expectations for the first Fed cut into late 2026, weighing on bitcoin and other risk assets.
- For crypto, a credible political drumbeat for cuts could support medium‑term bullish narratives, but in the short term traders are still trading off Fed guidance and data that argue for rates staying at 3.5–3.75% longer.
Political pressure builds for easier Fed policy
Acting Labor Secretary Sandlin’s remark, reported by Jinshi, that the Federal Reserve should “consider lowering interest rates” adds an explicit voice from the administration’s economic team to a growing chorus arguing that current policy is too tight for the labor market. While the exact wording of Sandlin’s statement has not been widely syndicated yet, it echoes recent comments from Fed officials like Governor Christopher Waller and Vice Chair for Supervision Michelle Bowman, who have both said they are prepared to back cuts if job losses mount or labor data deteriorate.
Waller told CNBC in March that he supported holding rates at the April meeting but was “willing to advocate for rate cuts later this year” if the labor market “remains weak,” while Bowman warned in January that, absent “a clear and sustained improvement in labor market conditions,” the Fed should be ready to bring policy “closer to neutral.” In parallel, former Treasury Secretary Steven Mnuchin has criticized the central bank for being “too slow” to lower rates after being late to hike during the pandemic, telling The National that he expects the terminal rate to settle between 3% and 3.5%, below where the Fed has been for much of the past year.
Despite this, the center of gravity inside the Fed is still firmly on the side of caution. A late‑April Reuters poll of economists found that most now expect the first cut no earlier than Q4 2026, with war‑related energy shocks and sticky inflation leading markets to scale back bets on 2026 easing. Minneapolis Fed President Neel Kashkari has gone further, telling Reuters that the oil shock from the Strait of Hormuz and Gaza could even justify hiking again if inflation re‑accelerates, and Boston Fed President Susan Collins recently said she was “strongly supportive” of holding rates at 3.5–3.75% rather than signaling imminent cuts.
What a cut — or delay — means for crypto
For crypto markets, what matters is less Sandlin’s individual statement and more how it interacts with the evolving Fed path. Crypto.news has already documented how falling odds of 2026 rate cuts have pressured bitcoin, with one story noting that BTC retreated after strong GDP data pushed back expectations for easing and left traders re‑pricing key support around $80,000. Another crypto.news story showed a similar pattern after disappointing jobs revisions in February: as markets inferred “higher for longer,” the total crypto market cap dropped and bitcoin slid below $67,000.
When cuts do arrive, the reaction is not always straightforward. As BitMarkets pointed out in an analysis, a recent 25‑basis‑point Fed cut to the 3.5–3.75% range, though fully priced in, did not produce the expected follow‑through in BTC and ETH, with both coins stalling as traders sold the news. In another episode tracked by TradingView’s news desk, bitcoin briefly spiked above $93,000 on the announcement of a Fed cut before fading as markets digested guidance that further easing would be gradual.
The through‑line is that crypto trades the whole policy regime, not just the direction of the next move. Goldman Sachs Research still forecasts two more Fed cuts over the next year, which would leave rates around 3–3.25%, but warns that a higher‑for‑longer scenario remains plausible if inflation stays sticky. For now, Sandlin’s call for cuts might help bolster the medium‑term narrative that political and labor‑market pressure will eventually force the Fed to ease — a backdrop that historically has favored bitcoin and ethereum as “duration” assets — but until the data flip or Fed communication softens, the balance of risk for crypto remains tied to a policy rate that is, in the Fed’s own words, “significantly in restrictive territory.”
