Market expectations are that the U.S. February PCE data will show that inflation pressures remain, with PCE rising to 0.4% month over month and 2.8% year over year. Core PCE is expected to be around 3.0% year over year, above the Federal Reserve’s target. The Federal Reserve may continue to hold the 3.50%-3.75% interest-rate range in April, while rate-cut expectations cool.

A research report from China International Capital Corporation (CICC) notes that the Iran–U.S. conflict has pushed up oil prices, increasing inflation risks, affecting expectations for Fed rate cuts, and driving selling of gold ETFs. Geopolitical developments put oil prices at a crossroads, while the gold market is focused on how an economic downturn could affect it; in the future, it may reassess expectations for rate hikes. Demand for gold investment and prices may have room to rise.

Dallas Fed Chair Logan outlined several paths for the Federal Reserve to reduce its balance sheet, emphasized the effectiveness of the current liquidity management framework, and noted that regulatory adjustments can encourage banks to lower their reserve levels. She criticized that some liquidity rules have failed to improve safety and said that reserves could be used more efficiently.

Gate News update: On April 1, Fed Governor Musalem and Fed Vice Chair Barr will deliver remarks one after another in about ten minutes.

Gate News message, Bitcoin and Ethereum posted negative returns in Q1, with BTC down 23.6% and ETH down 30.6%. The declines were driven by rising oil prices and Fed uncertainty. Historically, a red Q1 following a long rally serves as a necessary market cooldown.

Gate News reports that on March 30, Federal Reserve Governor Milan publicly stated that the size of the Federal Reserve’s balance sheet (the total assets held by the Fed) is too large and that they hope to reduce it.

On March 27, U.S. Representative Maxine Waters sent a letter to Federal Reserve Bank of Kansas City President Jeff Schmid requesting information about the approval process for Kraken Financial's limited-purpose master account, including permissions, access to Federal Reserve services, and related compliance measures. A response is requested by April 10.

Analyst Benjamin Louvet from OpFi Investment pointed out that the Federal Reserve faces challenges in balancing inflation and employment, and may not choose to raise interest rates. Additionally, declining revenues in Gulf countries could impact U.S. debt financing, forcing the Fed to lower interest rates or resume bond purchases.

Gate News reports that on March 26, the market has increased expectations of a Federal Reserve rate hike, and it is now believed that the probability of the Fed raising interest rates this year has exceeded 50%.

Federal Reserve Chair nominee Kevin Warsh hopes to significantly shrink the Federal Reserve's balance sheet, and Stanford Professor Darrell Duffie points out that reforming bank liquidity requirements and payment systems is necessary, but some reforms may take five years to complete.