Will Trump Create an Economic Miracle Immediately After Taking Office?
With about a month left until Trump's inauguration and the market generally expecting inflation to rise after he takes office, the Federal Reserve's recent 25 basis point rate cut and Powell's hawkish remarks have significantly lowered the expectation of two 25 basis point rate cuts in 2025, much below previous expectations.
In fact, the Federal Reserve has postponed its goal of controlling inflation to 2% until 2027, indicating that it believes there is significant uncertainty regarding inflation under Trump's administration.
Currently, the Bitcoin bull market is supported by ETFs and institutional funds represented by MSTR. However, despite the Federal Reserve's 25 basis point rate cut, the financial environment remains tight. Since September, long-term bond yields and mortgage rates have been rising, and the strengthening dollar poses macro risks for Bitcoin, as a stronger dollar is also related to the contraction of the global money supply, which often negatively affects Bitcoin and other crypto assets, with the Federal Reserve's net liquidity continuing to decrease.
As Christmas approaches and the 2024 fiscal year comes to an end, along with Trump's impending inauguration, the capital markets have already priced this in. Historically, this time window tends to be relatively quiet for capital markets. Industry giant Arthur Hayes believes that the cryptocurrency market will experience a painful crash around January 20, 2025, during Trump's inauguration ceremony, followed by buying on dips.
