QCP: The Federal Reserve is expected to maintain stable interest rates, and declining liquidity expectations may put pressure on Bitcoin.

Gate News bot message, QCP pointed out in its market analysis that the conflict in Iran has entered its sixth day, with missile exchanges continuing and diplomatic breakthroughs still far away. Leaders of the G7 have repeatedly called on Iran to resume nuclear talks with the United States. The talks were originally scheduled for this Sunday, but it now seems unlikely.

The market is increasingly concerned about the potential restructuring of the power dynamics in the Middle East and the implications this may have for regional geopolitics, as the United States, Russia, and China all intervene through proxies. The Strait of Hormuz is a pressing issue. If Tehran is cornered, the interruption or complete blockade of this critical chokepoint will become a tangible tail risk. The Strait of Hormuz accounts for a significant share of global oil transportation, and any supply shock will have a notable impact on inflation.

President Trump has taken a particularly tough stance, openly calling for Iran to "unconditionally surrender." With much of Iran's military leadership under pressure and key facilities destroyed, market consensus seems to lean toward Iran partially or completely yielding to the demands of Israel and the United States. However, the outcome remains highly uncertain.

This geopolitical pressure has intensified the already tense global macro environment, characterized by persistently high inflation and a re-adjustment of the global tariff system. The so-called trade war may have quietly come to an end, but investors' attention has quickly shifted to the Middle East.

As geopolitical conflicts escalate and inflationary pressures gradually rise, the Federal Open Market Committee will hold a meeting tonight in a challenging environment. First tariffs, now missiles. This is not a typical battle against inflation.

We expect the Federal Reserve to keep interest rates stable while taking a tough stance, acknowledging that geopolitical instability poses new upside risks to inflation. Currently, the market expects the Federal Reserve to cut interest rates twice in 2025 and then cut rates twice again in 2026. However, our baseline expectation is that the Federal Reserve may adopt a more cautious tone in its SEP, which could mean that there will only be one rate cut in 2025, contrasting sharply with market expectations.

Due to the decline in liquidity expectations, such adjustments may put pressure on risk assets, including Bitcoin and the broader digital assets.