Recently, the outlook for the rebound of the US dollar has faced severe challenges. Analysis from Deutsche Bank reveals the complex dilemma currently faced by the Federal Reserve: on one hand, it is strongly influenced by political pressure, while on the other hand, it has to deal with the continuously deteriorating fiscal situation.

Political interference has significantly undermined the independence of the Federal Reserve. A recent notable example is the dismissal of Federal Reserve Governor Lisa Cook, an action that has raised concerns about the increasing political influence in the monetary policy-making process. Although Federal Reserve Chairman Powell strives to maintain independence, the decision-making process has inevitably been affected.

At the same time, the financial situation in the United States is also worrying. The rising levels of debt and expanding fiscal deficits are eroding the fundamental support of the dollar. This structural problem poses a significant threat to the long-term trajectory of the dollar.

In the cryptocurrency market, awareness of the risk of credit collapse is particularly acute. The internal and external pressures currently faced by the Federal Reserve make the possibility of the dollar regaining its past strength extremely slim. The dual blow of chaotic policy-making and fiscal difficulties may lead to a continued weakening of the dollar over a certain period in the future.

For investors considering bottom-fishing for the US dollar, the immediate priority is to assess whether the Federal Reserve can extricate itself from the current political predicament. With the Federal Reserve struggling to maintain its independence, the rebound potential of the dollar is severely constrained, and the likelihood of continued decline is high.

This situation has also drawn attention to the cryptocurrency market. As the traditional financial system faces challenges, some investors may turn to decentralized assets like Bitcoin as a hedge against political and economic uncertainty. However, the crypto market itself also faces volatility and adjustments, and investors need to carefully weigh the risks and opportunities.