Fed's Goolsbee: if tariffs are avoided, policy rate can come down

(Reuters) -Chicago Federal Reserve Bank President Austan Goolsbee on Thursday said he believes that if big tariffs could be avoided, either through trade deals or otherwise, the central bank could likely cut interest rates, given the underlying strength of the economy and the direction of inflation.
Goolsbee did not comment directly on a ruling Wednesday by a US trade court that blocked many of the tariffs put on by the Trump administration, including the aggressive "Liberation Day" levies from April 2. Before that date, Goolsbee said, the labor market was stable and inflation was heading towards the Fed's 2% goal, conditions that would allow the Fed to bring the policy rate down to its long-term settling point, well below the current 4.25%-4.5% rate.

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CNBC

41 minutes ago

• CNBC

Bitcoin sinks below $99,000 as U.S. strikes on Iran trigger crypto market sell-off

Bitcoin fell to its lowest level since May over the weekend, as rising tensions in the Middle East and renewed inflation fears triggered a sharp selloff across digital assets. Bitcoin dropped below the $99,000 mark on Sunday — its lowest point in more than a month — as the crypto market became the first to react to escalating geopolitical risk. Bitcoin is trading around $99,380, down more than 2% over the past 24 hours, while ether has dropped 5% to below $2,200. Solana, XRP, and dogecoin also posted sharp losses, dragging the entire crypto complex deep into the red. The selloff appears to be a combination of geopolitical shock and macroeconomic concern. Iran has reportedly threatened to block the Strait of Hormuz — a vital shipping lane that handles about 20% of global oil supply. JPMorgan warns that a full closure could drive oil prices as high as $130 per barrel. One prominent macro research firm notes that such a spike could send U.S. inflation back toward 5% — a level not seen since March 2023, when the Fed was still actively raising rates. That outlook has traders reassessing the path of interest rates — and rotating out of speculative assets like crypto. While bitcoin is often pitched as an inflation hedge, it's currently behaving more like a high-beta tech stock. According to crypto data provider Kaiko, bitcoin's correlation with the tech-heavy Nasdaq has climbed sharply in recent weeks, after hitting a multi-month low earlier this year — a period that coincided with surging inflows into spot bitcoin ETFs. Institutional positioning also appears to have shifted. More than $1.04 billion flowed into spot bitcoin ETFs from Monday through Wednesday last week, according to data from CoinGlass. But those inflows collapsed heading into the weekend, with zero net movement Thursday and just $6.4 million on Friday — coinciding with President Donald Trump's early G7 departure and the announcement of a two-week review of U.S. options on Iran. The technical breakdown added fuel to the selloff. CoinGlass research shows bitcoin's drop below $99,000 triggered forced selling across offshore derivatives platforms like Binance and Bybit. At its peak on Sunday, more than $1 billion in crypto positions were liquidated during a 24-hour span — with over 95% coming from long bets, underscoring just how overexposed the market was heading into the weekend.

Yahoo

an hour ago

• Yahoo

Solana's SOL Falls 8% as Traders Brace for Fallout From a Spike in Oil Price

Solana (SOL) SOL is trading at $128.82, down 8.33% in the past 24 hours, after a steep intraday correction linked to rising geopolitical tensions. The token dropped from $140.39 to $127.25, with the sharpest hourly decline occurring at 13:00, when sell pressure spiked and trading volume exceeded 4 million, according to CoinDesk Research's technical analysis model. The market reaction followed confirmed reports of U.S. military strikes targeting Iranian nuclear sites, triggering widespread risk aversion across crypto markets. Some traders now worry that a closure of the Strait of Hormuz, even if temporary, could send oil prices soaring. That would likely stoke inflation, reduce the odds of near-term Fed rate cuts, and prolong the risk-off environment hurting crypto markets. A direct attack on the waterway could intensify the sell-off in altcoins, as bitcoin dominance historically rises during periods of geopolitical turmoil. SOL's decline also marked a break below key technical levels, including the 200-day simple moving average near $149.54. Throughout the session, SOL printed lower highs and struggled to sustain rebounds, pointing to weakening market structure. With elevated volume on red candles and technical indicators flashing bearish, traders are now watching the $120–$125 zone as a potential support area. Technical Analysis Highlights SOL dropped 8.1% from $140.39 to $129.02 during the analysis period, forming an $11.37 decline. The session's widest price range stretched from $141.14 to $126.85, a 10.2% intraday swing. The largest hourly drop occurred at 13:00, with price falling from $133.58 to $128.82 on 4.03M volume. A descending channel developed across the session, with lower highs and lower lows confirming bearish structure. Key resistance formed at $133.80, which capped multiple rebound attempts. Initial support emerged at $127.43, while a new intraday floor formed at $128.90. From 15:25 to 15:27, a volume spike pushed price below $129.30 during a continuation sell-off. Late-session movement showed SOL trading between $130.42 and $128.85 under consistent sell pressure. Several recovery attempts near $130.05 failed as volume increased on each rejection. Significant supply concentration appeared near $130.20, reinforcing short-term bearish momentum. Parts of this article were generated with the assistance from AI tools and reviewed by our editorial team to ensure accuracy and adherence to our standards. For more information, see CoinDesk's full AI Policy.

Vox

2 hours ago

• Vox

Three ways Trump's attack on Iran could spin out of control

is a senior correspondent at Vox, where he covers ideology and challenges to democracy, both at home and abroad. His book on democracy,, was published 0n July 16. You can purchase it here. Vice President JD Vance, President Donald Trump, Secretary of State Marco Rubio, and Defense Secretary Pete Hegseth during an address to the nation in the East Room of the White House in Washington, DC, on June 21, 2025. Carlos Barria/Reuters/Bloomberg via Getty Images When Vice President JD Vance appeared on Meet the Press on Sunday morning, anchor Kristen Welker asked him a simple question: Is the United States now at war with Iran? In response, Vance said, 'We're not at war with Iran; we're at war with Iran's nuclear program.' This is akin to saying that, in attacking Pearl Harbor, Imperial Japan had merely declared war on America's warship construction program. Yet it's notable that Vance felt the need to engage in such contortions — and that President Donald Trump, in his address to the nation last night, went out of his way to emphasize that there were no additional strikes planned. The Trump administration does not want to admit it has begun a war, because wars have a way of escalating beyond anyone's control. What we should be worrying about now is not how the US-Iran fighting began, but how it ends. It is all too easy to see how these initial strikes could escalate into something much bigger — if Iran's nuclear program remains mostly intact, or if Iran retaliates in a way that forces American counter-escalation. It's possible neither occurs, and this stays as limited as currently advertised. Or factors beyond our knowledge — the 'unknown unknowns' of the current conflict — could lead to an even greater escalation than anyone is currently predicting. The worst-case scenario, an outright regime change effort akin to the 2003 invasion of Iraq, cannot be entirely ruled out. I don't know how bad things will get, or even if things are likely to get worse. But when I watched Trump's speech, and heard his obviously premature claims that 'Iran's key nuclear facilities have been completely and totally obliterated,' I couldn't help thinking about another speech from over 20 years ago — when, after the toppling of Saddam Hussein in 2003, George W. Bush stood on an aircraft carrier and declared 'Mission Accomplished.' The mission hadn't been accomplished then, as it almost certainly hasn't been now. We can only hope that the resulting events this time are not a similar kind of catastrophe. Escalation pathway one: 'finishing the job' We do not know, at present, just how much damage American bombs have done to their targets — Iranian enrichment facilities at Fordow, Natanz, and Isfahan. Satellite imagery shows that there are above-ground buildings still standing, belying Trump's claims of complete destruction, but many of the targets are underground. It's possible these were dealt a severe blow, and it's possible they weren't. Either scenario creates pathways to escalation. If the damage is indeed relatively limited, and one round of American bombs was not able to shatter the heavily reinforced concrete Iran uses to protect its underground assets, the Trump administration will face two bad choices. It can either let a clearly furious Iran retain operational nuclear facilities, raising the risk that they dash for a nuclear weapon, or it can keep bombing until the attacks have done sufficient damage to prevent Iran from getting a weapon in the immediate future. That commits the United States to, at minimum, an indefinite bombing campaign inside Iran. But even if this attack did do real damage, that leaves the question of the program's long-term future. Iran could decide, after being attacked, that the only way to protect itself is to rebuild its nuclear program in a hurry and get a bomb. It has already moved to quit the Treaty on Non-Proliferation of Nuclear Weapons (NPT), an agreement that gives international inspectors (and, by extension, the world) visibility into its nuclear development. There are, again, two ways to ensure that Supreme Leader Ali Khamenei doesn't make such a choice: a diplomatic agreement akin to the 2015 nuclear deal, or else a war of regime change aimed at overthrowing the Iranian government altogether. The first isn't impossible, but it certainly seems unlikely at present. The US and Iran were negotiating on its nuclear program when Israel began bombing Iranian targets, seemingly using the talks as cover to catch Iran off guard. It seems very unlikely that Iran would see the US as a credible negotiating partner now that it has joined Israel's war. That leaves the other form of 'finishing the job': a full-on war of regime change. My colleague Josh Keating has argued, convincingly, that Israel wants such an outcome. And some of Trump's allies, including Sens. Ted Cruz and Lindsey Graham, have openly called for it. 'Wouldn't the world be better off if the ayatollahs went away and were replaced by something better?' Graham asked, rhetorically, in a Fox News interview last Monday. 'It's time to close the chapter on the Ayatollah and his henchmen. Let's close it soon.' Such a dire outcome seems, at present, very distant. But the further Trump continues down a hawkish path on Iran, the more thinkable it will become. Escalation pathway two: a US-Iran cycle of violence There's a military truism that, in war, 'the enemy gets a vote.' It could be that Iran's actions force American escalation even if the Trump administration doesn't want to go any further than it has right now. So far, Iran's military response to both US and Israeli attacks has been underwhelming. Tehran is clearly hobbled by the damage Israel did to its proxy militias, Hezbollah and Hamas, and its ballistic missiles are not capable of threatening the Israeli homeland in the way that many fear. But there are two things Iran hasn't tried that are, after American intervention, more likely to be on the table. The first is an attack on US servicemembers stationed in the Middle East, of which there are somewhere between 40,000 and 50,000 at present. Of particular note are the US forces currently stationed in Iraq and Syria. Iraq is home to several Iranian-aligned militias that could potentially be ordered to directly attack American troops in the country or across the border in Syria. The second is an attack on international shipping lanes. The most dangerous scenario involves an attempt to use missiles and naval assets to close the Strait of Hormuz, a Persian Gulf passage used by roughly 20 percent of global oil shipping by volume. If Iran either kills significant numbers of American troops or attempts to do major damage to the global economy, there will surely be American retaliation. In his Saturday speech, Trump promised that if Iran retaliates, 'future [American] attacks will be far greater and a lot easier.' An effort to detonate the global oil market would, without a doubt, necessitate such a response: The US cannot allow Iran to hold its economy hostage. We do not, to be clear, know whether Iran is willing to take such risks, or even if it can. Israeli attacks have devastated its military capabilities, including ballistic missile launchers that allow it to hit targets well beyond its borders. But a 'cycle of violence' is a very common way that violence escalates: One side attacks, the other side retaliates, prompting another attack, and on up the chain. Once they start, such cycles can be difficult to prevent from spiraling out of control. Escalation pathway three: the Iraq analogy, or things fall apart I want to be clear that escalation here isn't a given. It is possible that the US and its Israeli partners remain satisfied with one American bombing run, and that the Iranians are too scared or weak to engage in any major response. But those are a whole lot of 'ifs.' And we have no way of knowing, at present, whether we're heading to a best- or worst-case scenario (or one of several possibilities in the middle). Key decision points, like whether Trump orders another round of US raids on Fordow or Iran tries to close the Strait of Hormuz, will determine which pathways we go down — and it's hard to know which choices the key actors in Washington, Tehran, and Jerusalem will make. I keep thinking about the 2003 Iraq war in part for obvious reasons: the US attacking a Middle Eastern dictatorship based on flimsy intelligence claims about weapons of mass destruction. But the other parallel, perhaps a deeper one, is that the architects of the Iraq War had little-to-no understanding of the second-order consequences of their choices. There was so much they didn't know, both about Iraq as a country and the likely consequences of regime change more broadly, that they failed to grasp just how much of a quagmire the war might become until it had already sucked in the United States. It's over 20 years later, and boots are still on the ground — drawn in by events, like the creation of ISIS, that were direct results of the initial decision to invade. Attacking Iran, even with the more 'modest' aim of destroying its nuclear program, carries similar risks. The attack carries so many potential consequences, involving so many different countries and constituencies, that it's hard to even begin to try to account for all the potential risks that might cause further US escalation. There are likely consequences taking shape, at this moment, that we can't even begin to conceive of. The nature of the Trump administration gives me little hope that they've properly gamed this out. The president himself is a compulsive liar and foreign policy ignoramus. The secretary of defense has run his department into the ground. The secretary of state, who is also the national security adviser, has more jobs than anyone could reasonably be expected to perform competently at once. It is, in short, far less competent on paper than the Bush administration was prior to the Iraq invasion — and look how that went. It's possible, despite all of this, that the Trump administration has adequately gamed out their choices here — preparing for all reasonably foreseeable contingencies and capable of acting swiftly in the (inevitable) event that some response catches the world by surprise. But if it didn't, then things could go badly and tragically wrong.