The US President is set to host and speak at the inaugural White House Crypto Summit this Friday, marking a pivotal moment for the cryptocurrency industry. This event underscores the administration's increasing interest in digital assets, potentially signaling a shift in national policy towards the burgeoning sector. The President recently hinted on Truth Social about advancing a US crypto strategic reserve, further highlighting the administration's proactive stance on digital currencies.
Alongside this development, last week's uptick in weekly claims suggests potential challenges in public sector hiring. This might signal looming weaknesses in employment, adding another layer to the complex economic landscape. Meanwhile, the US President's policy mix, which includes tariff threats, raises concerns about its potential to trigger a slowdown or even a recession in US growth. The markets have become increasingly sensitive to these risks, with confidence surveys turning pessimistic. The Atlanta Federal Reserve's latest GDPNow forecast predicts a 1.5% annualized GDP decline in the first quarter, reflecting these concerns.
In another significant move, former President Trump proposed a 25% rate for tariffs. However, Commerce Secretary Lutnick indicated that the final decision on this rate has yet to be made. This uncertainty adds to the broader economic narrative, where the possibility of a US growth slowdown looms large.
Internationally, the European trace presents noteworthy events. The European Monetary Union (EMU) released February inflation data today, preceding the European Central Bank (ECB) meeting on Thursday. Recently, several ECB members suggested a pause in the cutting cycle come April, with money markets currently assigning a 33% probability to this scenario. The ECB is expected to lower interest rates by 25 basis points to 2.5% later this week, potentially signaling a shift away from restrictive monetary policies.
Meanwhile, in China, leaders will convene on Wednesday for the National People's Congress. During this gathering, President Xi Jinping is anticipated to unveil a new stimulus plan aimed at boosting the economy. This development comes amid global uncertainties and fluctuating economic indicators.
Adding to the international economic concerns, rating agency S&P has issued a negative outlook on France's AA- credit rating due to increasing government debt and weak political consensus on addressing large underlying budget deficits. This development highlights the challenges faced by European economies as they navigate complex fiscal landscapes.
Back in the United States, discussions regarding digital assets continue to gain momentum. Following his inauguration, former President Trump signed an executive order supporting digital assets and blockchain technology. This move laid the groundwork for current discussions and potential policy advancements concerning digital currencies.
The possibility of the US Treasury purchasing one million Bitcoin is also under consideration, with legislative proposals already being drafted. This potential acquisition would mark a significant step for the US government in its engagement with digital currencies and could set a precedent for other nations exploring similar ventures.
As these developments unfold, the US growth story remains closely monitored. Markets are increasingly sensitive to the risks of a slowdown or recession in US economic growth. The President's involvement in hosting the Crypto Summit underscores this awareness and signals an acknowledgment of digital assets as integral components of future economic strategies.