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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The post Analysis: U.S. Inflation Is Set to Pressure Bitcoin Bulls appeared first on Coin Engineer.

Federal Reserve Discusses Inflation and Tariff Risks 

The U.S. Federal Reserve (Fed) made significant decisions during its Federal Open Market Committee (FOMC) meeting on May 6-7, 2025. Officials highlighted that tariffs could increase inflation, creating a challenging dilemma for interest rate policy. The minutes emphasized a cautious approach amid rising economic uncertainties. The Fed kept the federal funds rate steady at 4.25%-4.5%. Officials noted that economic growth remains solid, but risks of labor market weakening have increased. While consumers continue spending, concerns about persistent inflation have grown. Additionally, policy uncertainties are complicating the goals of full employment and low inflation. 

The Fed expressed concerns about variability in trade policies. Tariffs between the U.S. and China eased after the meeting, with both sides suspending heavy taxes for a 90-day negotiation period. This supported a recovery on Wall Street. However, bond yields continued to rise. Powell defended the Fed’s independence against Trump’s pressure for rate cuts. The meeting also reviewed the Fed’s five-year policy framework. Officials evaluated the “flexible average inflation targeting” strategy, noting it could be ineffective during major inflationary shocks. No plans to change the inflation target were announced. 

Trade Policies and Financial Stability Risks 

The Fed discussed the volatile policies of the Trump administration. While tariffs were suspended, they were not fully lifted. Officials noted that bond market volatility could threaten financial stability. Rising Treasury yields may have long-term economic impacts. The risk of both inflation and unemployment rising was emphasized, potentially forcing the Fed into a tough choice between tight monetary policy and supporting growth. Additionally, the Fed renewed dollar and currency swap lines to support global financial stability, aiming to address liquidity needs. 

Post-meeting, Trump delayed 145% tariffs on China, impacting bond yields and recession expectations. Consequently, markets do not expect a rate cut until the September meeting. The Fed is awaiting greater clarity due to policy uncertainties. Officials acknowledged the increasingly complex economic outlook. Inflation nearing the 2% target is making the Fed’s decisions more challenging. Financial market volatility is heightening recession risks. The Fed aims to both control inflation and support growth. 

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The post Fed Tackles Inflation, Tariffs at May 2025 FOMC appeared first on Coin Engineer.

In a Twitter statement, economist Zeberg said that the dollar’s loss of strength would bring new life to the cryptocurrency market.

The economist also stated that low bond yields in the US and the dollar’s appreciation against other fiat currencies have created an excellent environment for the rise of risk assets like cryptocurrencies.

Revealing the Altcoin

Zeberg, who is eyeing JasmyCoin (JASMY) to be included in the cryptocurrency rally, stated that the third wave is being experienced in crypto.

Zeberg stated that the next stage will come towards the summer as the dollar index (DXY) falls, and it will find support in the fall.

The economist also shared that JASMY could be as low as $0.3 for him, but he wants it to go higher.

Considering that JASMY is currently trading at around $0.02 according to CoinGecko data, the economist expects a minimum 15x performance.

The post Renowned Economist Reveals Bullish Conditions and Names Altcoin with “At Least” 15x Potential appeared first on Coin Engineer.