Yeliz Akmaca 
U.S. economic conditions remain unsettled. A new analysis by Adam Posen, president of the Peterson Institute for International Economics, and Peter Orszag, CEO of Lazard, challenges the widely expected “relief phase” priced into crypto markets. While investors anticipate easing inflation, the report suggests U.S. inflation could climb above 4% this year.
That scenario undermines the assumption that an era of cheap money is close at hand. For Bitcoin, whose bullish narrative has leaned heavily on falling inflation and faster rate cuts, the timing now looks far less certain. As inflation risks rebuild, the Federal Reserve’s room to ease policy appears increasingly constrained.
Inflation Pressures Are Re-Emerging
According to the analysis, several structural forces are resurfacing. Tariffs introduced during the Trump administration, tighter labor markets, and persistent fiscal deficits are regaining influence. Crucially, the authors argue that importers have not yet fully passed tariff-related costs on to consumers.
Posen and Orszag estimate that this delayed cost pass-through could be largely completed by mid-2026. When it is, headline inflation may receive an additional 50 basis point boost. At the same time, immigration policies and widening budget gaps risk offsetting productivity gains linked to artificial intelligence.
Bitcoin and Bonds Face the Same Constraint
Rising Treasury yields reinforce this message. The U.S. 10-year yield recently climbed to 4.31%, its highest level in five months, reducing the appeal of risk assets. Analysts at crypto exchange Bitunix warn that easing policy before structural inflation pressures clearly subside could force a sharper adjustment later.
Bitcoin bulls continue to price in aggressive rate cuts. However, inflation that remains near or above 4% weakens that thesis. As borrowing costs stay elevated, liquidity-driven rallies become harder to sustain.
At this stage, the core risk is not price alone but timing. If inflation fails to cool as expected, the recovery narrative for crypto assets may be delayed rather than denied.
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