The current uncertainty in risk markets translates to decline for cryptocurrencies. As the Biden administration transitions, the policies differ significantly from those attempted by Trump. The risk of inflation is pronounced, and the change in government leadership complicates matters further.
US Economy Sounds the Alarm
The NY Fed’s inflation expectation for the next year has risen to 3.13%, up from the previous 3%. According to reports, American citizens are growing increasingly worried about credit and the job market.
“February’s anticipated spending growth accelerated. The likelihood of missed debt payments is at its highest since April 2020. Expectations of worsened financial conditions in a year are at their peak since November 2023. The public anticipates significant future price increases for gas, rent, and food.”
All these indicators suggest that Trump must reconsider his approach of imposing additional tariffs before causing further damage. Recently, the Atlanta Fed’s GDP forecast for the first quarter of 2025 dropped into negative territory for the first time since 2022.
They anticipate a contraction of 2.4% in this quarter, raising concerns about recent growth figures.
