United States: Sticky inflation and Fed skepticism – NBC
Source Fxstreet
National Bank of Canada's (NBC) Taylor Schleich and Vy Le note that United States (US) growth expectations remain healthy, with GDP projected to expand above 2% in 2026, but they see a less benign inflation outlook. While headline inflation may approach 2% by mid-2027, core is described as stickier. They stress the Fed’s price-stability focus and a committee split leaning tighter, yet economists largely doubt rate hikes will occur in 2026.
Healthy growth but uncertain Fed path
"Meanwhile, the U.S. growth outlook remains stable and healthy, with the economy expected to expand more than 2%."
"The U.S. inflation outlook is not as benign."
"The headline gauge may reach (close to) 2% by mid-2027, but core appears stickier."
"That seems like it’d be a problem for this new-look, price stability-focused Fed where half the committee think tighter policy is needed."
"Only 10% of forecasters see the Fed hiking in 2026 and this more restrictive camp is still outnumbered by those calling for cuts."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
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Bitcoin experienced a sharp decline this weekend, briefly erasing its 2025 gains and dipping below its year-opening value of $93,507. The cryptocurrency fell to a low of $93,029 on Sunday, representing a 25% drop from its all-time high in October. Although it has rebounded slightly to around $94,209, the pressures on the market remain significant.
The downturn occurred despite the reopening of the U.S. government on Thursday, which many had hoped would provide essential support for crypto markets. This year initially appeared promising for cryptocurrencies, particularly after the inauguration of President Donald Trump, who has established the most pro-crypto administration thus far. However, ongoing political tensions—including Trump's tariff strategies and the recent government shutdown, lasting a historic 43 days—have contributed to several rapid price pullbacks for Bitcoin throughout the year.
Market dynamics are also being influenced by Bitcoin whales—investors holding large amounts of Bitcoin—who have been offloading portions of their assets, consequently stalling price rallies even as positive regulatory developments emerge. Despite these sell-offs, analysts from Glassnode argue that this behavior aligns with typical patterns seen among long-term investors during the concluding stages of bull markets, suggesting it is not indicative of a mass exodus.
Notably, Bitcoin is not alone in its struggles, as Ethereum and Solana have also recorded declines of 7.95% and 28.3%, respectively, since the start of the year, while numerous altcoins have faced even steeper losses.
Looking ahead, questions linger regarding the viability of the four-year cycle thesis, particularly given the increasing institutional support and regulatory frameworks now in place in the crypto landscape. Matt Hougan, chief investment officer at Bitwise, remains optimistic, suggesting a potential Bitcoin resurgence in 2026 driven by the “debasement trade” thesis and a broader trend toward increased adoption of stablecoins, tokenization, and decentralized finance. Hougan emphasized the soundness of the underlying fundamentals, pointing to a positive outlook for the sector in the longer term.
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