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HOW DO TRUMP TARIFFS IMPACT THE FED INTEREST RATE DECISION TODAY?
The Federal Reserve is expected to keep interest rates steady this week, with a 95% chance of no changes, as it adopts a cautious “wait and see” approach.
Despite a slow economy in Q1, inflation remains slightly above the 2% target, while unemployment stays low, giving the Fed more time to assess market conditions. The FED interest rate decision is crucial, as the Trump tariffs and ongoing US-China trade talks could influence future actions.
Trump Tariffs and Trade Optimism
The latest Trump tariffs and trade discussions between the US and China are bringing renewed optimism to the market. Credit Suisse analyst Ipek Ozkardeskaya notes that improving trade relations could boost risk assets and revive investor confidence in the US dollar. While the dollar didn’t surge during the peak of the tariff war, a shift in sentiment could drive its near-term performance.
FED to Stay in “Wait and See” Mode
The Federal Reserve remains focused on data, with many expecting no immediate rate cuts. As the Fed weighs Trump’s tariffs and a $4 trillion budget plan, it will likely hold off on making any drastic decisions. Although inflation is still above 2%, the FED interest rate decision will depend on the ongoing trade talks and economic trends.
Dollar Could Rebound Amid Trade Optimism
Trade optimism surrounding Trump tariffs and negotiations could potentially lift the dollar, shifting from a safe-haven narrative to broader confidence. Ozkardeskaya believes that this shift could reignite demand for the US dollar, marking a key development as the FED interest rate decision looms.
FED Interest Rate Decision
With little indication of drastic shifts in the economy, Fed Chair Jerome Powell is expected to keep messaging minimal, even as President Trump pushes for rate cuts. Analysts predict that the Fed may only cut rates if the labor market weakens significantly.
@ Newshounds News™
Source: Coinpedia
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ETHEREUM’S ‘PECTRA’ NETWORK UPGRADE GOES LIVE: WHAT TO EXPECT
Ethereum developers have activated the network’s Pectra upgrade, bringing smart accounts, higher staking limits and improved scalability through key EIPs.
Ethereum — the network that unleashed smart contracts on the world — moves on to the next chapter with today’s Pectra upgrade, but what does it mean?
Pectra went live on the Ethereum mainnet at the start of epoch 364032, May 7, 2025, at about 10:00 am UTC. The three main Ethereum improvement proposals (EIPs) included are EIP-7702, EIP-7251, and EIP-7691.
EIP-7702 allows externally owned accounts to act as smart contracts and cover gas expenses (transaction fees) and payments in tokens that are not Ether.
EIP-7251 increases the validator staking limit from 32 ETH to 2,048 ETH, simplifying operations for large stakers.
EIP-7691 increases the number of data blobs per block, allowing for better layer-2 scalability and potentially significantly reduced transaction fees.
Sergej Kunz, co-founder of Ethereum DEX aggregator 1inch, said Pectra “introduces ‘smart account’ functionality” at deeper protocol levels and “improves Ethereum’s scalability” through layer-2 solutions.
0xAw, lead developer at Base Ethereum layer-2 DEX Alien.Base, told Cointelegraph that EIP‑7702 is a “potentially great addition for Ethereum.” He said that account abstraction has struggled due to wallet switching requirements.
The positives of adopting this include:
- Getting rid of approval flows
- Not having to sign each transaction
- Segregated permissions and actions
- Automations on behalf of the user
“It enables a Web2-like UX by hiding many of the underlying scaffolding from users,” 0xAw added.
Kunz said the update will pave the way for native gasless transactions and simplified user flows.
Ivo Georgiev, CEO of smart wallet Ambire, noted:
- “No more infinite ERC-20 approvals”
- “Users won’t need native currency like ETH to pay gas fees”
He added:
“Following this, the UX will be reworked completely… wallets give more limited abilities to apps, increasing overall security — for example, no wallet popup every time you interact with OpenSea.”
Still, not without risks.
0xAw cautioned: “Users have one more dangerous thing they could sign, which would be even more damaging than an approval to wallet drainers.”
Mike Tiutin, CTO of PureFi, warned:
“Drainers proved that users will sign ‘harmless’ messages in cloned DApps. EIP-7702 expands that trick from one token to the whole wallet.”
Georgiev remains optimistic, saying:
“Confident there will not be a tangible increase in risk… the industry knows how to create a secure contract, especially with such a minimal scope as an EIP-7702 delegation.”
Easier Institutional Staking
Artemiy Parshakov, VP of institutions at P2P.org, said:
“EIP-7002 makes institutional staking much easier to integrate without taking too much risk.”
Before Pectra:
- Stakers needed a signed message from their provider to exit
- Couldn’t exit without provider participation
- Had to wait ~13 hours to generate exit message
Now with Pectra:
- Exit delay reduced to ~13 minutes
Supply Validator Deposits Onchain
EIP-6110 enables the execution-layer block to carry validator deposit data to the consensus layer.
Previously:
- Consensus clients waited for Merkle root votes from block proposers
Now: - Execution layer directly includes new verifier deposits
This upgrade affects the deep Ethereum consensus layer and follows bugs on Holesky and Sepolia testnets.
Parshakov concluded:
“Our biggest concerns are client bugs, but we trust the Ethereum Foundation and client teams are working to prevent issues on mainnet.”
@ Newshounds News™
Source: CoinTelegraph
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