QCP: Fed Independence in Focus as Gold and Bitcoin Emerge as Safe-Haven Assets

Key TakeawaysMarket attention is shifting from rate cuts to concerns over Federal Reserve independence, according to QCP Capital.Rising term premiums are lowering the threshold for a dollar downturn, boosting demand for alternative assets.Gold and Bitcoin (BTC) are gaining safe-haven appeal amid inflation risks and governance concerns.Markets still price in two Fed rate cuts in 2025, though tariffs could elevate inflation expectations.Fed Policy Debate Fuels Dollar WeaknessDigital asset trading firm QCP Capital said in a Sept. 3 note that investor focus has turned away from the timing of Federal Reserve interest rate cuts and toward the question of the central bank’s independence.The analysis, reported by TechFlow, highlighted that higher term premiums in long-dated U.S. Treasurys are lowering the bar for a dollar correction. Despite potential policy easing, the yield curve has steepened while the U.S. dollar has weakened, creating conditions for safe-haven flows.Gold and Bitcoin See Renewed SupportAgainst this backdrop, gold and Bitcoin have emerged as key hedging tools for investors navigating both inflation and governance risks.“Gold and Bitcoin are gaining support as safe-haven assets,” QCP wrote, pointing to increased interest following the recent Jackson Hole symposium, where a September rate cut was left on the table.Inflation and Tariffs Add UncertaintyWhile markets still expect two rate cuts in 2025, QCP cautioned that U.S. inflation is unlikely to return to the Fed’s 2% target in the near term. Moreover, new tariff measures could elevate inflation expectations further, complicating policy and adding fuel to safe-haven demand.