The Federal Reserve is now facing a whopping $1.06 trillion in unrealized losses on its balance sheet.

The New York Federal Reserve Bank, which handles the Fed’s bond transactions, just disclosed the losses, linking them to the central bank’s tight monetary stance.

The Fed’s bonds are losing value as the bank maintains higher-for-longer interest rates in a push to fight inflation.

The agency says it will ensure the losses won’t hit its bottom line or cash transfers to the Treasury.

“The unrealized gain or loss position of the SOMA portfolio has no effect on net income or Federal Reserve remittances to the Treasury unless assets are sold and gains or losses are realized.

Unrealized gains and losses have no effect on the conduct of monetary policy.”

The New York Fed also notes the unrealized losses, which are recorded through the end of 2024, were offset slightly as the central bank let bonds mature without reinvesting.

The Fed’s bond portfolio began witnessing significant unrealized losses over the previous two years, clocking $1.08 trillion in 2022 and $948.4 billion in 2023.

The account witnessed unrealized gains of $354 billion in 2020 and $127.9 billion in 2021.

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Bitcoin climbed 5.6% to $81,636 within an hour of the announcement, reflecting broader market optimism.

In his post, Trump said tariffs on Chinese imports would rise to 125% immediately, claiming China had failed to respect global market rules.

“China has been taking advantage of the United States and other nations for too long,” Trump wrote. “The days of ripping off the U.S.A. are over.”

90-Day Pause on New Tariffs for Other Countries, Says Trump

Alongside the China tariffs hike, Trump announced a 90-day delay for other countries, noting that over 75 nations were in discussions with U.S. officials about trade concerns such as currency policies and non-monetary barriers.

During the 90-day window, Trump authorized a temporary reciprocal tariff of 10% for participating countries.

Markets Rally After China Tariffs Announcement

U.S. markets rallied on the news. The S&P 500 gained over 5.5%, while the Nasdaq rose more than 8%.

It is not yet clear whether any countries other than China will face tariffs above 10% once the 90-day delay ends.

Trump’s message did not offer further specifics, though it implied that countries willing to negotiate could avoid harsher penalties.

The move appeared designed to pressure Beijing while keeping trade discussions open with other partners.

With markets responding positively for now, attention turns to China’s reaction and whether the 90-day window leads to progress.

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The post Trump Hikes China Tariffs to 125%, Grants 90-Day Delay for Other Nations appeared first on Cryptonews.

03 February Bitfinex alpha | BTC shakes by tariff hikes but remains resilient

Bitcoin price action is increasingly reflecting the broader macroeconomic development, in a strong response to President Donald Trump’s US policy announcement. Over the past week, Bitcoin has fallen below $100,000, tailored to expectations for lower volatility and potential short-term market-wide revisions. Bitcoin began 2025 with a 10% increase in January, but its momentum slowed, with prices consolidated within the 15% range over the past 65 days.

In fact, BTC leads the US stock market when it comes to responding to macro development. The double-top structure seen on both Bitcoin and the S&P 500 charts first occurred in BTC. The latest market catalyst, Trump’s tariff announcement – caused a 0.5% drop in the S&P 500 and a more pronounced decline in Bitcoin last Friday. Bitcoin’s 30-day rolling correlation with the S&P 500 rose to 0.8, marking its highest level in five months. This reinforces the view that Bitcoin is traded like a macro-driven risky asset.
Despite short-term volatility, Bitcoin remains structurally strong in a higher time frame. BTC has surpassed traditional markets since the US election, exceeding $67,000 to $100,000, but stocks have shown a choppy recovery.

BTC/USD 4H chart. (Source: Bitfinex)
Against this backdrop, the US economy continues to show resilience through solid consumer spending and economic expansion, but also faces headwinds due to policy uncertainty, trade disruption and stubborn inflation.
The Federal Reserve has stabilized interest rates at 4.25-4.50% last week, indicating that policymakers are not ready to ease financial terms until inflation shows a clear downward trend. Consumer spending spiked in December, with actual spending increasing by 0.4%, further strengthening economic growth, but complicating the Fed’s path.

Changes in PCE (personal consumption expenditure) price index over a month

Inflation rate exceeds the central bank’s 2% target, with core PCE inflation hovering at 2.8% year-on-year. Despite slow wage growth, the tough labor market and potential immigration restrictions could lead to higher labor costs and increased inflation risk. Meanwhile, the economic expansion shut down to 2.3% the year, supported by strong household consumption and increased government spending, but lower business investment and trade uncertainty continue to pose risk.

Therefore, the market reduced expectations and reduced pricing when there was a low chance of short-term easing. With the flux’s political and economic variables, the coming months will be important in determining whether the Fed will ease or maintain its restrictive stance to combat inflationary pressures.

As the US economy navigates periods of resilience mixed with policy uncertainty, the cryptocurrency sector is experiencing its own inflection point. It is marked by aggressive institutional accumulation, financial innovation and deeper integration with traditional financial infrastructure. Inflationary pressures pending the Federal Reserve have made market participants careful observations of how digital assets respond to macroeconomic trends, changes in monetary policy, and increased corporate adoption.

MicroStrategy continues to double Bitcoin, obtaining an additional 10,107 BTC for $1.1 billion, bringing its total holdings to 158,400 BTC. The company has also submitted shelving registrations with the SEC, allowing it to efficiently raise funds for future Bitcoin purchases. Meanwhile, Metaplanet, a registered company in Tokyo, has created history with $745 million in funding to expand its Bitcoin reserve, and amortization of the yen is “Bitcoin First, Bitcoin, Bitcoin” Only” strategy has been strengthened. This illustrates the growing institutional belief that Bitcoin serves as a hedge against financial decline and economic instability. At the same time, Tether is expanding the usefulness of the $140 billion USDT Stable Coin by integrating it into Bitcoin’s Lightning network. This move will greatly enhance Bitcoin’s financial infrastructure, enabling faster and more efficient global transactions. By leveraging Taproot assets, Tether bridges the gap between Stablecoins and Bitcoin security, creating a more viable payment network, rather than valuable storage.

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