Donald Trump likes tariffs. A lot. And the market, well, it doesn’t much care for them. Not one bit. Bitcoin, caught in the crossfire, dipped below $75,000 recently, a ten percent drop. The Nasdaq 100 wasn’t feeling any better, shedding twelve percent. It’s a bit like watching a toddler with a very expensive vase, isn’t it? You know something’s going to break.
- Trump’s tariff policies are negatively impacting the market, causing drops in Bitcoin and the Nasdaq 100. This situation is creating uncertainty and instability in the financial markets.
- Economist Nouriel Roubini believes the Federal Reserve will not quickly intervene to rescue the market from the effects of these tariffs. He anticipates that Jerome Powell will allow Trump to face the consequences of his policies.
- The market is highly sensitive to any news regarding potential deals or changes in tariff policies. False reports can cause temporary surges followed by deflations when the news is proven untrue.
Economist Nouriel Roubini – Dr. Doom himself – isn’t expecting a quick rescue from the Federal Reserve. He figures Jerome Powell will play it cool, letting Trump twist in the wind a bit. A “game of chicken,” Roubini calls it. Powell’s not rushing in to clean up a mess largely of Trump’s making. It’s a waiting game. A single tweet, a hint of a deal with China, and everything could flip. We saw a taste of that earlier this week with a false report of a tariff pause. Markets surged, then promptly deflated when the news proved… optimistic, let’s say.
The Powell Put and Sticky Inflation
The idea of a “Powell put” – the Fed stepping in to prop up markets – is tempting. Traders have priced in five interest rate cuts this year. Roubini thinks that’s wishful thinking. He believes inflation will be stubbornly high, thanks to these new tariffs. Longer-dated Treasury bonds are already feeling the pain, yields are climbing, and prices are falling. It’s a messy situation. But, surprisingly, Roubini doesn’t foresee a recession. Which, given the general gloom, is… something.
So, what does this mean for crypto? Volatility, mostly. Bitcoin, despite its “digital gold” aspirations, is still very much tied to the broader market sentiment. Tariffs create uncertainty, uncertainty breeds fear, and fear sends investors scrambling. It’s a simple equation, really. And while some might see this as a buying opportunity, it’s a risky one. Remember the cardinal rule of crypto: never invest more than you can afford to lose. It’s a good rule in general, actually.
The Treasury market’s wobble is particularly interesting. It’s raising concerns about a dollar liquidity crisis, similar to what we saw during the COVID crash. That’s not a comforting thought. It suggests the underlying plumbing of the financial system is a bit… strained. And when the plumbing is strained, things tend to leak. Or, in this case, crash.
Roubini’s prediction – that Powell will wait for Trump to blink – feels plausible. It’s a political calculation as much as an economic one. Powell doesn’t want to be seen as bailing out Trump, especially after the former president’s… unconventional approach to economic policy. It’s a standoff. And in a standoff, someone has to yield. The question is, who?
The market, for now, is holding its breath. Every Trump tweet is scrutinized, every economic data point is dissected. It’s exhausting, frankly. But that’s the nature of the beast. Crypto, along for the ride, will continue to bounce around, reacting to every twist and turn. It’s a wild world, this financial market. And right now, it’s a particularly wild one.
