With less than a week remaining before Donald Trump’s inauguration as the 47th U.S. President, his economic policies are already stirring significant market reactions, according to QCP Capital.
Market Trends and Concerns
Strong Job Market and Inflation Fears:
Non-farm payrolls rose unexpectedly by 256,000 last week (forecast: 165,000).
Despite cooling PPI data, markets anticipate December’s CPI to be higher than the previous figure, potentially intensifying inflation concerns.
Proposed tariffs on major trading partners could exacerbate inflation and push bond yields higher, with 10-year and 30-year Treasury yields nearing 5%.
Market Performance:
The S&P 500 briefly dipped below 5,800 points.
Bitcoin slipped below $90,000, testing key support levels multiple times amid global bond market volatility.
Crypto-Friendly Outlook
QCP Capital highlighted that despite the unfavorable macro environment for risky assets, the Trump administration could issue crypto-friendly executive orders, offering short-term support to the market. However, as the inauguration approaches, volatility is likely to intensify, requiring heightened vigilance against downside risks.
