Recent events in the global economy could significantly change liquidity dynamics in the crypto market. The US is imposing new tariffs on imports from China, Mexico, and Canada, which will inevitably affect inflation and economic growth.
What does this mean for the macroeconomy?
➡️ Inflation — prices for imported goods will rise, creating additional pressure on consumer spending.
➡️ Economic growth — increasing tariffs may slow the growth rate as companies face rising costs, and export-oriented industries may face retaliatory measures from other countries.
➡️ Labor market — job cuts are possible in sectors dependent on international trade.
How will the Fed react to this?
Previously, the market awaited a decrease in the interest rate in 2024, but with rising inflationary pressure, the Fed may pause. Jerome Powell has already stated that further steps will depend on macro data.
And what about crypto?
🚀 If the Fed continues to keep the rate high, liquidity in the crypto market will remain limited — large investors will prefer traditional assets.
📉 In the event of a sharp rise in inflation and a weakening stock market, crypto may also experience sell-offs.
🔄 However, in the long term, a weaker dollar may rekindle interest in Bitcoin as an alternative means of savings.
Conclusion: as long as the Fed remains cautious and trade wars create uncertainty, liquidity in the crypto market remains under pressure. But if the US economy slows down, it could drive Bitcoin's growth.