Senator Elizabeth Warren is urging the Federal Reserve to make significant cuts to interest rates this week. She believes that high borrowing costs have been hurting the U.S. economy for too long.

In a letter to Fed Chair Jerome Powell, she called for a 75-basis-point cut. Senators John Hickenlooper and Sheldon Whitehouse signed the letter as well. Meanwhile, traders expect the Fed to lower rates by either 0.25% or 0.5%, as they are currently at a 23-year high.

Bitcoin's price rose recently as traders reacted to articles from the Wall Street Journal and Financial Times. These articles suggested that the Fed's decision on rate cuts could be a close call. Currently, traders see a 57% chance that the Fed will start a series of cuts, beginning with a 50-basis-point drop. Just a month ago, that chance was only 25%.

While rate cuts usually boost risk assets like stocks and cryptocurrencies, Warren and her colleagues argue for a larger cut. They point to the declining health of the labor market. With inflation cooling off, they say it’s crucial for the Fed to act quickly. They noted a significant revision showing 818,000 fewer jobs in March than previously reported.

Additionally, the unemployment rate has ticked up to 4.2%, a concerning shift from a historic low of 3.5% last July. The lawmakers stated, “While the economy remains strong overall, this softening of the labor market offers further justification for lowering rates.” They emphasized that employment numbers change slowly, so the Fed should act now to prevent a possible crisis.

Taking a cautious approach could put the economy at unnecessary risk, they warned. They referenced a previous comment from Powell, where he stated that the Fed does not want to see further cooling in labor market conditions. Just days ago, the Fed seemed to lean toward a cautious approach after an inflation report indicated persistent core inflation, which excludes volatile food and energy prices. At that time, the market leaned toward a 25-basis-point cut, with concerns that a 50-basis-point cut might unsettle investors.

While the senators' proposed cut could heighten fears of an economic slowdown, some experts have recently called for a 75-basis-point cut. For instance, Wharton Business School Professor Jeremy Seigal suggested immediate rate cuts during a global market sell-off, claiming that such a cut could lead to a market rebound.

Warren, known for her critical stance on cryptocurrencies, has previously called for stricter regulations. In 2021, she described “shadowy super-coders” as a threat to the financial system. She has also raised national security concerns regarding foreign involvement in crypto mining. Her comments have drawn backlash from the crypto community. Currently, John Deaton, a crypto lawyer, is campaigning against her Senate seat, backed by over a million dollars from Ripple Labs.

Despite her critical views on crypto, Warren seems to find common ground with the industry when it comes to the Fed’s potential for aggressive rate cuts.

In market news, stocks like MicroStrategy and Coinbase saw declines as Bitcoin's momentum cooled. At 9:45 AM ET, Coinbase (COIN) dropped 4% to $156.63. MicroStrategy (MSTR), the largest corporate holder of Bitcoin, fell 5% to about $133. The Valkyrie Bitcoin Miners ETF (WGMI) also decreased by 5%, landing near $16. Meanwhile, the S&P 500 remained flat, and the Nasdaq 100 was down 0.5%.

Political meme coins tied to former President Donald Trump also took a hit after a suspected assassination attempt over the weekend. Following the first attempt, the Solana meme coin TREMP soared 71% in 24 hours, with TRUMP and MAGA coins also rising. However, TREMP has since dropped 5% in the last day.

In another development, stablecoin issuer Circle announced support for its Bridged USDC Standard on Sony's Ethereum layer-2 network, Soneium. Sony Block Solutions Labs will integrate the Bridged USDC Standard into Soneium, a public Ethereum layer-2 blockchain ecosystem. This partnership aims to make USDC one of the primary tokens for value exchange on the platform, according to a joint statement from the companies. The integration is expected to facilitate...