The tightening monetary policy period has been a challenging time for cryptocurrency investors. As interest rates rise and fall, the Fed is looking for new explanations for inflation, and Trump might become the new target.
The Impact of Inflation and Trump's Role
In recent years, the Fed has blamed several external factors to justify inflation. The COVID-19 pandemic, wars, and supply chain disruptions all affected the economic situation. However, with these explanations losing steam, the focus may soon shift to Trump's proposed tariffs by 2025.
Causes of Inflation
Inflation in the U.S. is driven by government spending and the central bank's policy of increasing the money supply. Factory slowdown and port restrictions also exacerbate price increases. The Fed's role is to prevent price changes from infiltrating the economy.
Trump's Tariffs and Their Impact
Trump's proposed tariffs may only serve as justification for the Fed. Although tariffs could mitigate inflation in the long term, their short-term impact would be minimal. If Trump presents these tariffs in upcoming meetings, it may be met with skepticism.
As dissatisfaction with the current Fed measures grows, positioning Trump as the inflation culprit may become necessary. However, the focus should remain on the more significant economic factors.
