Bitcoin rebounds to US$85k

Key market insights

• Bitcoin rebounds: Bitcoin surged to US$85K following a softer-than-anticipated inflation reading of 2.8%. XRP saw a gain of more than 7%, while Avalanche (AVAX) increased by 1.56%.
• Fed expected to hold steady, cut rates in September: The US Federal Reserve is set to keep rates unchanged this week, with economists expecting two cuts starting in September. Fed Chair Jerome Powell faces pressure to address stagflation risks and clarify future policy direction in the face of growing economic uncertainty under Trump.
• ‘Trumpcession’ fears weigh on US Fed and Bank of England: Fears of a "Trumpcession" are rising with tariffs driving inflation and weakening US consumer confidence. Both the US Federal Reserve and the Bank of England are expected to hold rates steady for now but cut rates later this year to ease the economic strain.

The weekly trading stats as of Monday, March 17th at 11:00 am AEDT, based on data from Tradingview in USD.

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Bitcoin rebounds to US$85k

Bitcoin has bounced back to US$85K following the recent CPI report, which showed inflation at a lower-than-expected 2.8%. XRP stood out with a nearly 7% gain over the past week, while Avalanche (AVAX) followed with a 1.56% increase. Despite this, the broader crypto market remains about 30% down from its December 2024 highs, with investors proceeding with caution amid fluctuating monetary and fiscal policies. Analysts caution that the current rally may not last, as ongoing trade tensions, new tariffs, and economic instability under Trump’s policies could stoke inflation again and maintain high market volatility.

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Fed expected to hold steady, cut rates in September

The US Federal Reserve is expected to keep interest rates unchanged at its meeting this week, with economists projecting two rate cuts starting in September. Based on a survey of economists conducted by Bloomberg, all the uncertainty around Trump’s economic policies, particularly on trade and tariffs, has led to revised growth forecasts and increased inflation projections. With financial markets watching closely, Fed Chair Jerome Powell faces mounting pressure to navigate stagflation risks and provide clearer guidance on future monetary policy.

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Fears of ‘Trumpcession’ put pressure on both Fed and Bank of England

Concerns over a potential "Trumpcession" are mounting as tariffs fuel inflationary pressures and weaken consumer confidence in the U.S. With the Federal Reserve expected to announce its interest rate decision this week, analysts are warning that further trade disruptions could push the economy toward recession. Meanwhile, the Bank of England faces a tough call on Thursday, balancing inflation risks with slowing economic growth. Both central banks are expected to hold rates steady for now, and market watchers are anticipating rate cuts later this year to counter the growing economic strain.

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US consumer spending slows with growing economic uncertainty

US shoppers are pulling back on spending. Retail foot traffic dropped 4.3% year-over-year in early March, while fast-food visits declined 2.8% in February. The University of Michigan’s consumer sentiment index fell for the third consecutive month, hitting its lowest level since November 2022. Investors worry that Trump’s unpredictable economic policies could further disrupt businesses and slow growth.

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Looking ahead

Bitcoin’s recent rebound provided a much-needed temporary sigh of relief to the market. However, broader economic conditions remain fragile. Despite inflation cooling to 2.8%, uncertainty around U.S. trade policies and fiscal strategy continues to weigh on risk assets. XRP’s recent gains have been a rare bright spot, yet with crypto markets still nearly 30% down from December highs, volatility is expected to persist.

Analysts caution that ongoing tariffs, economic slowdown concerns, and potential inflationary pressures could limit further upside in the near term. Consumer spending trends in the U.S. suggest rising caution among households, with declining retail foot traffic and fast-food sales signaling weakening demand. If economic conditions deteriorate further, pressure on central banks to cut rates sooner could intensify, potentially influencing both traditional and digital asset markets in the months ahead.

For now, all eyes are on the US Federal Reserve’s rate decision this week, with expectations that policymakers will hold steady before two potential rate cuts in September and December. The Bank of England faces a similar dilemma, balancing inflation risks against slowing growth.

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