This year, the crypto market’s demand for quantitative easing went unfulfilled as the Federal Reserve did not increase liquidity. Despite the shelving of monetary tightening measures by December, quantitative easing did not commence, leaving the Fed in a notably more conservative stance compared to other central banks globally. The year 2025 could have been exceptional for cryptocurrencies, yet the Federal Reserve’s restraint became a significant hurdle. At the same time, the White House remains jubilant over President Trump’s vindication in policy matters.
White House Statement
Trump consistently vocalized that tariffs would not fuel inflation, advocating for interest rate reductions throughout the year. His approach included derogatory remarks towards Powell and attempts to remove Fed officials, exemplified by his unsuccessful dismissal of Hawkish member Cook, who was reinstated by court order. The White House, represented by Press Secretary Leavitt, eventually acknowledged Trump’s strategic accuracies, especially in the face of economic trends marked by declining inflation and rising wages.
“As President Trump told Americans last night: inflation continues to decline, wages are on the rise, and America is heading for an unprecedented economic boom. Today’s report shows inflation far below market expectations, contrasting starkly with the previous record-level inflation crisis at 9% under Joe Biden. Prices in key segments like food, medicine, gas, airfare, car rentals, and hotels continue to drop, setting a new low for core inflation. Americans can expect this trend of falling prices and rising wages to persist into the New Year!”
Interest Rates Decline and Crypto Prospects
The optimistic spirit of today’s inflation reports suggests a positive trajectory. Still, until inflation drops below 2%, Powell and the Hawks at the Fed do not consider themselves victorious, consistently arguing that swift interest rate reductions are inappropriate while inflation remains above desired levels.
The year 2026, a critical election time, necessitates Trump to initiate economic policies conducive to electoral success. Recognition of this scenario requires the Federal Reserve to adapt, catalyzing a rapid onset of quantitative easing that also spurs the growth of risk assets, including cryptocurrencies. Recent data indicates a 70% decline in inflation since its peak in the Biden era. If the current momentum continues, inflation could potentially dip to as low as 1.2%.
The significant decline in gas prices and cost reductions across various sectors positively impact inflation. Trump’s assertions about reduced housing inflation due to curbing illegal immigration have likewise proven accurate. The White House celebrates the success by sharing expert insights.
- Steve Liesman from CNBC described the figures as “very impressive.”
- Matt Egan from CNN highlighted it as “ another step in the right direction.”
- Ken Rogoff from Harvard regarded the data as “better than everyone’s expectations.”
- Steve Moore lauded the news and expressed optimism for both Wall Street and Main Street.
- Mark Tepper from Strategic Wealth Partners noted the unexpected reduction in inflation.
- Tiana Lowe Doescher from The Washington Examiner praised the achievement.
- Chris Anstey from Bloomberg called the figures “remarkable” for surpassing expectations.
- Andrew Ackerman from The Washington Post noted the relief from cooled inflation in November.
However, the anticipation for rate cuts in 2026 remained unchanged from 2% to 3%, as the December inflation report must indeed confirm today’s data before the next rate decision is made.
