The latest discussion around the U.S. economy is revealing a sharp divide. On one side, policymakers and former officials argue that the economy is stronger than many believe and does not need immediate interest rate cuts. On the other, a top Federal Reserve official is openly dismissing crypto as “utterly useless,” raising fresh concerns for digital assets.
Recent Federal Reserve minutes suggest there is limited support for cutting interest rates anytime soon. Some regional Fed presidents are even discussing the possibility of raising rates instead of lowering them.
Former Deputy Treasury Secretary Michael Faulkender echoed that view. He argued that deregulation, tax reform, and energy expansion could boost productivity and allow the U.S. economy to grow without triggering inflation. According to him, current Fed models underestimate the impact of productivity improvements driven by artificial intelligence and energy development.
Some projections discussed during the conversation were bold. Growth of 5% with inflation below 1% was described as possible if productivity rises and energy prices fall.
Critics argue that the Fed’s economic models do not fully account for deregulation, supply side tax cuts, or rapid AI adoption. Supporters of policy changes believe these factors could reshape growth and inflation trends in 2026.
While economic policy was under discussion, one Federal Reserve voice turned attention directly toward crypto.
Neel Kashkari, President of the Federal Reserve Bank of Minneapolis, did not hold back during remarks at the Midwest Economic Outlook Summit.
“Crypto has been around for more than a decade, and it’s utterly useless,” Kashkari said.
He compared the crypto industry to artificial intelligence, arguing that AI has clear everyday economic value, while digital assets have failed to prove they solve real world problems.
Kashkari also warned that cryptocurrencies and stablecoins could pose risks to the banking system. He said widespread use of stablecoins might reduce traditional bank deposits, limiting banks’ ability to lend.
A major use case often promoted by crypto advocates is faster cross-border payments. Kashkari challenged that claim.
He pointed out that even if digital tokens are sent instantly across borders, recipients still need to convert them into local currency to buy goods and services. That conversion, he argued, brings back costs and friction.
According to Kashkari, only a single global currency would truly remove cross-border payment friction. But he believes countries are unlikely to give up control over their own monetary policy.
He also criticized vague explanations about how stablecoins create value. “Ask the most basic questions,” he said, warning against what he described as “word salad nonsense answers” about how crypto works.
Kashkari’s comments come at a sensitive time for the crypto market. Digital assets often react strongly to Federal Reserve policy signals. If rate cuts are delayed and monetary policy remains tight, liquidity conditions could stay restrictive for risk assets, including Bitcoin and altcoins.
At the same time, direct criticism from Fed officials adds to regulatory uncertainty. When central bankers publicly question crypto’s usefulness and highlight risks to banking stability, it can influence how lawmakers and regulators approach the sector.
The Fed sees the U.S. economy as strong, with growth and productivity gains, so it may keep rates steady to control inflation.
Yes, productivity improvements and lower energy costs could drive higher growth without sparking major inflation.
While transfers can be instant, converting to local currency adds costs, so crypto doesn’t fully remove payment friction.
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