Stefan Rust, CEO of Trinflation, stated that the Department of Government Efficiency (DOGE) needs to reconsider how the U.S. government measures and manages the health of the economy using real-time data.

DOGE must support more responsive policies

Stefan Rust, CEO of Truflation, stated that his open letter to DOGE aims to encourage the company's leaders, Elon Musk and Vivek Ramaswamy, to reconsider how the U.S. government measures and manages the health of the economy. Rust argues that this newly established agency has extraordinary capabilities in collecting real-time and nuanced data on inflation and productivity.

The CEO of Truflation shared with Bitcoin.com News that acquiring such capabilities means that this newly established agency "can see immediate changes in purchasing power, the labor market, and consumption patterns." In turn, possessing such information allows U.S. policymakers to make "policies that respond more quickly, where decisions are informed not only by the past but also illuminated by current needs."

Rust also hopes his letter will encourage DOGE to adopt a data-driven approach that embraces technology aligned with the organization’s "forward-thinking principles."

Regarding the economic outlook for the United States under Donald Trump, Rust warns that national debt could undermine Republican policies focused on deregulation and competitive corporate tax rates. To achieve its goals, Rust predicts the Trump administration will need to pursue a more calculated balancing act.

In additional comments, Rust discussed indices that help investors stay ahead of inflation and shared his thoughts on the impact of interest rate cuts on the cryptocurrency market. Below are Rust's answers to all the questions submitted.

Bitcoin.com News (BCN): As Donald Trump prepares to take office as the 47th President of the United States, what are his expectations for his administration, particularly regarding federal spending, inflation, and interest rates?

Stefan Rust (SR): The U.S. is at a critical juncture where inflation, government spending, and interest rates will determine the economic trajectory of the nation, not just during Trump's presidency but potentially for the next decade. Just the U.S. debt alone is paralyzing the country; I believe that about 46% of the total increase in debt in U.S. history has been accumulated during Janet Yellen's time at the Fed and as Treasury Secretary.

Traditionally, Trump's policies focused on deregulation, competitive corporate tax rates, and stimulating investment through strategic spending programs. But with the national debt at such high levels and global supply chains still adjusting after unprecedented disruptions, the new government will need to walk a fine line.

If the administration pursues significant federal spending without a corresponding increase in productivity, we could see inflationary pressures persist. However, the Federal Reserve has shown an increasing willingness to act independently and may choose to maintain a tighter monetary policy – in other words, slightly higher interest rates – to control inflation, despite the risk of reducing business lending activity and slowing the housing market.

My expectation is that we will witness a more carefully calculated balancing act. The White House may call for investment in infrastructure designed to boost productivity, hoping to offset inflationary pressures in the medium term. However, inflation will not only be determined by political will. It will reflect the resilience of global supply chains, energy market stability, labor market dynamics, and the pace of capital flowing into new technologies – including AI and decentralized technologies.

BCN: Some analysts argue that lower interest rates could lead to increased consumer spending and investment in riskier assets, such as cryptocurrencies. How accurate is this statement, and how does it apply to the current situation in the U.S. cryptocurrency market?

SR: There are many truths in this theory: you just need to look back at the "stimulus checks" given during the lockdown, many of which were reinvested into Robinhood or any exchange listed on Coinbase. When money is easier to come by, you tend to spend more freely – especially when you believe, rightly or wrongly, that you will comfortably make a profit to pay off your low-interest loan.

And when interest rates are low, remember that returns from traditional savings accounts and bonds also decrease, making them less attractive. Why would you want to earn 2% a year in a dull fixed-income investment account when you could just buy Solana or Bitcoin? I'm not implying that every consumer thinks this way, but it’s understandable why cryptocurrency thrives in a low-interest environment.

Lower interest rates often create a risk-on mentality in the market, where investors are willing to take on more risk to pursue higher returns. This shift in sentiment affects not only consumers but also institutional investors, who may allocate more into higher-risk assets, including cryptocurrencies. When a large number of investors adopt this risk-seeking behavior, it can create upward price momentum – and make memecoin traders ridiculously wealthy, further fueling FOMO.

BCN: What core indices should investors look for to stay ahead while monitoring inflation in a challenging economic environment?

SR: Inflation is very complex, due to supply chain frictions, commodity prices, labor costs, currency fluctuations, and changes in consumption patterns. One thing I am acutely aware of from my work with Trinflation is that inflation is not anything: it is everything. It is the rent we pay, the gas we put in our cars, the takeout food we order, and the groceries we buy. Only by being able to see the big picture can we assess the extent to which inflation can erode purchasing power and diminish our savings.

For this reason, inflation indices aggregate particularly valuable data points in capturing the true price of inflation, as well as personal computers and similar tools that allow individuals to identify within real groups the extent to which they are affected in their net profits. It's also useful to reference indices tracking alternative assets, including Bitcoin, Gold, and Oil, allowing individuals to determine how they can make financial decisions that will counteract the harmful effects of inflation through investments in markets that are not dependent on the amount of green dollars that the Fed chooses to print.

It's also worth noting that inflation is not just about rising prices; it's about the balance between income and expenses. Wage growth without corresponding productivity gains can exacerbate inflation. Conversely, improving productivity can absorb higher wages without driving up prices. Monitoring these rates is very useful for assessing whether inflationary pressures are cyclical or structural.

BCN: Recently, he wrote an open letter to the U.S. Department of Government Efficiency (DOGE), led by Elon Musk and Vivek Ramaswamy. Can he share with readers the content of the letter and what issues he wants DOGE to pay attention to?

SR: My open letter to the U.S. Department of Government Efficiency (DOGE) is both a call for dialogue and a challenge to reimagine how we measure and manage the health of our economy. Traditional data collection and policy-making methods can feel like steering a ship by only looking at yesterday's charts. I want DOGE to recognize that we possess extraordinary new capabilities to obtain nuanced, real-time metrics on inflation, productivity, and capital flows.

At a time when encrypted ecosystems, AI-driven analytics, and on-chain data can provide immediate, transparent, and tamper-proof information, relying solely on delayed government reports or outdated macroeconomic assumptions is untenable. My aim is to point out that platforms like Truflation offer a richer, more dynamic perspective. Through these tools, policymakers and the American public can see nearly instantaneous changes in purchasing power, the labor market, and consumption patterns.

Ultimately, my hope is that DOGE will adopt a data-driven approach, embracing technology that aligns with its forward-thinking principles, eliminating outdated, rigid ways of working. By recognizing that today's digital infrastructure is as essential as roads or ports, DOGE can help usher the country into an era of smarter, faster-reacting policies, where decisions are informed not only by the past but also illuminated by current needs.

BCN: Trinflation, a project you are involved in, recently introduced a Risk Hedging Index to track Real World Assets (RWA). This index provides a benchmark for the performance of aggregated RWAs over time. Reports suggest that this development will help investors reduce their risk of losses due to inflation. Can you explain the logic behind the newly launched Risk Hedging Index and how it can help investors navigate challenges?

SR: The Truffle Inflation Hedging Index tracks the prices of five essential asset classes, including stocks, precious metals, commodities, and currencies. This index includes assets such as oil, gold, silver, Bitcoin, and the S&P 500, each weighted differently – for example, 10% of the index is formed by BTC. This index is an invaluable resource for assessing how alternative assets can help protect investors against inflationary pressures.

Additionally, the Truflation Hedge Index provides a way to effectively tokenize assets in the real world. DeFi protocols can use price feeds from the assets in the index to develop decentralized financial products. They could even bundle these assets into a diversified basket, tradeable as a single token or index on-chain. For investors, this is very convenient as it provides exposure to multiple real-world assets (RWA) in a convenient consolidated form, eliminating the need to buy and manage each individual asset.

BCN: As the former CEO of Bitcoin.com, a leading global cryptocurrency platform, can he share some insights from his tenure? What were some of his major achievements, and how has his experience at Bitcoin.com influenced his current role as CEO of Truflation?

SR: Indeed, at Bitcoin.com, I had the honor of working alongside some OGs who were there right from the inception of Bitcoin or close to it. When I became CEO, that was a time when the battle to scale Bitcoin was still ongoing; the industry was much smaller than it is now, and the discourse was still dominated by a handful of eccentric figures and often libertarians. That spirit informed the content we produced through the Bitcoin.com news department, where I take pride in the fact that we always strive to publish the truth without fear or bias.

It makes sense to say that, in hindsight, Bitcoin.com had spread itself too thin at one point when trying to expand into too many verticals. I take pride in helping to solidify its operations with the news department at the core, and I'm pleased to see it still serves as a beacon of truth and is one of the oldest media sites in the cryptocurrency space, which is a remarkable achievement.

One of the most valuable lessons I learned from my time at Bitcoin.com is that it's great to surround yourself with smart people, sometimes with very different opinions. When founding Truflation, I wasn't interested in hiring a group of men and women who only knew how to say yes: I wanted to find people who could challenge me, provide critical thinking, and unique ideas. Whether it's an intern or an executive, where the idea comes from doesn't matter: if it's valuable, it's valid. We need to build quickly and scale, and that's what we're doing!