The probability of increased tariffs under Trump’s presidency could lead to higher prices for goods and services in response to countries that unfairly charge the US a higher price. China is at the top of the list of countries that could be affected, and the crypto segment could also be impacted as the Federal Reserve may hesitate to cut rates at the desired pace in the future.
Trump’s intentions are to protect the US economy by boosting national manufacturing, but retaliatory measures could raise inflation concerns. A higher rate or a slow cut in rates would mean that investors have little borrowing power, making funds more expensive to acquire and allocate to risky assets like crypto.
This could affect the liquidity of the crypto market, with a higher injection of funds being better for the market. If Trump follows through with his tariff war, the Federal Reserve could be forced to slow down its measures. A quarter cut is anticipated for this Thursday, and the one scheduled for December may see a different number.
Higher rates discourage investors from borrowing funds, affecting their allocation to risky assets like crypto and reducing market liquidity. Rates cuts at a slower pace would translate to less borrowing power and less allocation, leading to insufficient liquidity or liquidity at a lower level. Prices of digital tokens like BTC and ETH may reflect this by slowing down.
One way the current political scenario could work best for the crypto segment is if there is a more supportive environment for it, with whales accumulating BTC and PEPE with hopes of taking profits later in the year. Memecoins are rising, and Trump-themed politico meme tokens are also on the rise. It remains to be seen how seriously Trump executes his commitment to increasing tariffs for international trade.
Source
<p>The post Trumps Tariffs: Impact on Crypto Fed Rate Cuts first appeared on CoinBuzzFeed.</p>
