Fed’s “Third Mandate” Could Weaken Dollar and Propel Bitcoin Higher

     

Trump’s Fed nominee cites overlooked statutory goal that could justify yield curve control, boosting crypto markets

A little-known statutory clause in the Federal Reserve’s founding documents could reshape US monetary policy – with major implications for both the dollar and crypto.

While the Fed is widely recognized for its dual mandate of price stability and maximum employment, President Donald Trump’s nominee for Fed governor, Stephen Miran, recently highlighted a “third mandate”: to ensure moderate long-term interest rates.

The Trump administration may use this requirement as justification for more aggressive bond market interventions, potentially through yield curve control, expanded quantitative easing, or other forms of monetary easing, Bloomberg reported Tuesday.

Lowering long-term interest rates

The third mandate has historically been treated as a byproduct of achieving the Fed’s two main goals, but Trump officials are now citing it as legal backing for direct suppression of long-term rates.

Such measures could include bond buybacks, increased Treasury issuance, or outright yield curve control – where the Fed purchases bonds to keep borrowing costs at target levels.

Lower long-term rates would ease the burden of servicing America’s record $37.5 trillion debt and could also stimulate housing by reducing mortgage costs.

Positive impact on crypto

Christian Pusateri, founder of Mind Network, called the revived mandate “financial repression by another name,” noting its resemblance to yield curve control.

“The price of money is coming under tighter control because the balance between capital and labor, debt and GDP, has become unstable,” he said. “Bitcoin stands to absorb massive capital as the preferred hedge against the global financial system.”

Former BitMEX CEO Arthur Hayes also weighed in, suggesting yield curve control could ultimately drive Bitcoin’s price toward $1 million.