Bitcoin has once again bounced off the major support area, showing strong buying pressure in this zone. The price has also reclaimed the 50 DMA, which is a positive sign for the bulls.
Trump’s proposed tariffs pose a significant inflation risk, which could impact the Federal Reserve’s approach to rate cuts. Higher tariffs would lead to inflation spikes, forcing the Fed to maintain a slow and cautious stance rather than aggressively cutting rates. This “higher for longer” neutral rate scenario would weaken liquidity flows into risk assets like the S&P 5p00 and Bitcoin, putting downward pressure on their prices.
At the same time, slower rate cuts would increase demand for the U.S. dollar, causing XXXUSD pairs (eg. BTCUSD, EURUSD, SPXUSD) to decline. The irony here is that while Trump is pushing for faster rate cuts, his own tariff policies would likely delay them.
Overall, as long as the real Fed interest rate remains above CPI levels, inflation will continue to trend downward. However, baseline turbulence in the markets should be expected, creating uncertainty for investors.
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