- CBO says Trump’s tariffs to reduce U.S. federal deficit by $2.8 trillion.
- Economic growth slowdown and inflation rate increase are projected.
- Potential shifts in crypto due to macroeconomic changes.
The CBO’s analysis reveals that while the tariffs may ease the federal deficit, they are likely to detract from economic growth. President Donald Trump spearheads the initiative with senior Democratic leaders reviewing the report. Phillip L. Swagel, CBO Director, highlighted the changes in U.S. economic indicators due to these tariffs.
The plan’s anticipated economic repercussions include slower U.S. growth and higher inflation, negatively impacting household purchasing power. The CBO’s analysis outlines the complex trade-offs between financial deficit reduction and broader economic effects.
CBO Projects $2.8 Trillion Deficit Reduction Amid Economic Warnings
Immediate market implications include inflationary pressures that could raise the annual inflation rate by 0.4 percentage points and reduce GDP growth by approximately 0.06 percentage points annually. Households may face eroded purchasing power, emphasizing the trade-offs involved in this fiscal strategy.
Phillip L. Swagel, Director, Congressional Budget Office, said, “If the Administration makes additional changes to tariffs, the budget baseline will be adjusted to reflect the budgetary implications of those changes as they take effect.”
Market and governmental reactions are guided by the CBO’s insights. No major statements from key industry figures or responses from crypto exchanges have emerged yet. Household financial dynamics and potential market shifts in cryptocurrencies and other assets generally regarded as hedges against inflation are possible.
Cryptocurrency Market Poised for Change with Tariff-Induced Inflation
Did you know? The CBO’s projections echo past impacts from Trump’s initial tariff imposition in 2018–2019. Then, markets experienced volatility, and assets like Bitcoin gained appeal amid inflation fears.
Bitcoin (BTC) currently trades at $104,599.44 with a market cap of approximately $2,078,870,943,663.66. Its circulating supply nears 19,874,590 BTC, as of June 5, 2025. Recent 24-hour trading volume saw a robust $43,697,212,963 movement despite a 0.90% price dip over the same period. Statistics sourced from CoinMarketCap.
Coincu researchers suggest that financial landscapes may shift as inflation intermittently influences crypto markets. Historical patterns indicate Bitcoin and Ethereum’s allure amid economic uncertainties may rise. Technological advancements and regulatory shifts weigh heavily on future price trajectories.
Source: https://coincu.com/341708-trump-tariffs-deficits-growth-crypto-impact/