1. President Trump has signed over 200 executive orders, and one of the biggest changes in economic policy is the upcoming tariff policy. Last night, Trump indicated that he might impose a 25% tariff on Mexico and Canada as early as February 1, which could create market resistance, such as triggering inflation.
2. Following the previous point, DB indicated that if a 25% tariff on Canada and Mexico results in a 50% pass-through, PCE inflation would rise by 80 basis points; if it is 75%, PCE inflation would increase by 110 basis points.
The market currently expects interest rate cuts to begin in June 2025, with a 67% probability of a cut. The baseline scenario indicates only 1 to 2 cuts in 2025, while previously, it was expected that there would be 5 cuts when the Fed began to pivot.
3. Speaking of interest rate cuts, 79% of FMS investors still expect a rate cut, with 39% expecting 2 cuts by the #FOMC, 27% expecting 1 cut, 13% expecting 3 cuts, and only 2% anticipating that the Fed will raise rates in 2025. What would happen if rates are raised? Unimaginable~
4. Trump emphasized that tariffs are both a source of revenue and a tool of protectionism, incentivizing companies to bring manufacturing back to the U.S.
Trump acknowledged the economic benefits of immigration but emphasized the necessity of strict legal entry, highlighting concerns about criminal activities by undocumented immigrants and claiming that countries like Venezuela are releasing prisoners into the U.S.
Trump reiterated his criticism of Federal Reserve Chairman Jerome Powell, claiming that Powell's interest rate policy has harmed economic growth during his presidency.
Trump insists on his strategy towards China, stating that the strategy holds the Beijing government accountable through tariffs and trade restrictions, and warns that the dollar's status as a reserve currency is at risk, blaming U.S. debt and leadership perspectives.
On Google and #TikTok, Trump expressed concerns about his power and influence, suggesting that he may take regulatory actions if re-elected. He stated that Google is manipulated and TikTok is a security threat, but fairness is needed.
5. The year 2025 may be a year of stagnation for AI enthusiasm due to data scarcity and energy limitations, as well as overly optimistic earnings forecasts. AI may exhaust the human-generated text used as training data for this year's AI models. If the models are over-trained, or the speed of human data generation is slower than expected, data exhaustion could occur more quickly, and synthetic data could lead to a rapid decline in quality.
6. The establishment of a strategic Bitcoin reserve by the U.S. means that other countries in the G24 may follow suit; $BTC could become the new gold standard. Coinbase CEO Brian Armstrong stated that finance ministers around the world are increasingly interested in strategic Bitcoin reserves.
7. Regarding cryptocurrencies, the higher the market capitalization, the greater the chance of success. We should not spend too much time chasing gems or alpha; focusing on reliable projects with a strong community and reassuring on-chain metrics is also important.
8. MicroStrategy shareholders approved two amendments allowing the company to increase the number of authorized shares to help continue its plan to purchase more.
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