U.S. Inflation Expectations Decrease Amid Tariff Concerns – Coincu

Inflation expectations in the U.S. have dropped significantly in June, according to Joanne Hsu from the University of Michigan. This comes as consumer concerns over tariffs ease.

The reduction in inflation expectations suggests less pressure for monetary tightening, potentially favorable for markets.

Inflation Expectations Fall as Tariff Concerns Ease

Inflation expectations in the U.S. have seen a notable decline, with year-ahead views dropping from 6.6% in May to 5.1% in June. This follows a statement from Joanne Hsu, Director of the University of Michigan’s Consumer Survey. The drop is attributed to reduced consumer anxiety over tariff impacts on future inflation.

The adjustment in inflation expectations indicates a minor shift in economic sentiment. Despite easing pressures, the figures remain higher than the forecasts for the later parts of 2024, hinting at ongoing concerns regarding trade policy effects on inflation.

“Year-ahead inflation expectations plunged from 6.6% last month to 5.1% this month. Long-run inflation expectations fell for the second straight month, stepping down from 4.2% in May to 4.1% in June. Both readings are the lowest in three months. Consumers’ fears about the potential impact of tariffs on future inflation have softened somewhat in June. Still, inflation expectations remain above readings seen throughout the second half of 2024, reflecting widespread beliefs that trade policy may still contribute to an increase in inflation in the year ahead.” — Joanne Hsu

Bitcoin Price Holds Amid Shifting Economic Sentiments

Did you know? Inflation expectation shifts have historically impacted Bitcoin positively, as lower projections typically ease monetary policy pressures, supporting risk assets.

As of June 13, Bitcoin (BTC) is priced at $105,306.04 with a market cap of $2.09 trillion and dominance at 64.04%, according to CoinMarketCap. Recent trading volumes saw a 40.18% increase to $73.12 billion. Bitcoin’s 24-hour price fell by 2.25%, but it remains positive over 7-days at 0.63% and a 90-day increase of 25.07%.

Insights by the Coincu research team suggest a cautious outlook, referencing historical shifts in macroeconomic conditions and the likelihood of future implications for risk-sensitive assets like cryptocurrencies. Patterns indicate slower immediate reactions, with potential long-term interest in major tokens like BTC and ETH.