Triggering countermeasures from trading partner countries, leading to increased risks of a global trade war.
* Reshaping Supply Chains: Companies may be forced to adjust supply chains and seek alternative production bases, increasing operational costs.
* Inflationary Pressures: Rising prices of imported goods will push up domestic prices, exacerbating inflation.
Can the tax cut 'rocket' ignite the U.S. economy?
Trump's tax cut plan aims to stimulate domestic investment and consumption, with potential impacts including:
* Economic Growth: Tax cuts are expected to boost corporate profits and personal disposable income, potentially driving economic growth in the short term.
* Expanding Fiscal Deficit: Large-scale tax cuts may lead to further expansion of government fiscal deficits, potentially triggering a debt crisis in the long run.
* Investor Confidence: Tax cut policies may boost investor confidence, attracting more funds into the U.S. market.
Overlay of Dual Policies: Increased Market Volatility
The dual policy of tariffs and tax cuts will bring intense uncertainty to the market in the short term.
* Stronger Dollar: Tax cuts and potential capital inflows may drive up the dollar exchange rate.
* Stock Market Fluctuations: Risks of trade wars and inflationary pressures may lead to increased volatility in the stock market.
* Safe-Haven Assets in Favor: Safe-haven assets such as gold and the dollar may be favored by investors.
Cryptocurrency: The Dual Challenge of Risk Assets and Safe-Haven Properties
As a high-risk asset, cryptocurrencies will face the following challenges:
* Synchronized Fluctuations with Risk Assets: Stock market turbulence may trigger a chain reaction in the cryptocurrency market.
* Impact of a Stronger Dollar: A stronger dollar may have a negative impact on cryptocurrency prices.
* Inflation Hedge Property: If inflationary pressures intensify, the safe-haven properties of cryptocurrencies may come under scrutiny, but their volatility might deter investors.
However, cryptocurrencies may also benefit from this:
* Decentralized Characteristics: In the context of increased global trade uncertainty, the decentralized nature of cryptocurrencies may attract some investors.
* Demand from Emerging Markets: If trade wars lead to depreciation of emerging market currencies, cryptocurrencies may become an alternative asset.
Conclusion: Uncertainty is the only certainty
Trump's policy mix undoubtedly brings high uncertainty to the global economy and financial markets. In the short term, the market may oscillate between optimism brought by tax cuts and concerns raised by tariffs. In the long run, the impact will depend on the specific implementation of policies and the response of the global economy.
For cryptocurrencies, future trends will be influenced by both the global economic environment and investor sentiment. Investors should closely monitor developments, cautiously assess risks, and prepare for market volatility.
