This week saw the release of significant US inflation data. While Donald Trump advocates for lower interest rates, Powell doesn't show particular concern regarding this issue.
US Inflation Data
Donald Trump is persistently calling for lower interest rates, believing this could be achieved by increasing oil supply. However, OPEC+ announced a reduction of 118,000 barrels per day in production compared to December. Trump argues that tariffs will lower commodity prices and affect inflation, although they are also leading to higher imported goods prices.
Projections and Market Reactions
According to reports, inflation expected to decline in the latter half of the year might be neutralized by Trump's tariffs. January data shows: - US CPI Yearly: 3% (Expectation: 2.9%, Previous: 2.9%) - US Core CPI: 3.3% (Expectation: 3.1%, Previous: 3.2%) These results indicate that the Fed's goal remains challenging, decreasing investors' risk appetite. Consequently, investors anticipate the Fed will implement fewer rate cuts.
Impact on Cryptocurrencies
Following the inflation data, Bitcoin has shown a rapid price decline, highlighting the crypto market's sensitivity to macroeconomic conditions.
January's US inflation data has become a pivotal point for assessing future monetary policy actions. Despite Trump's initiatives, market reactions reflect a cautious approach regarding rate cut expectations.
