Economists forecast a serious return of inflation in the US, threatening the plans of crypto investors

New economist calculations show that inflation in the US could exceed 4% this year, which sharply differs from the optimistic expectations of Bitcoin supporters, who anticipate further declines in borrowing costs. According to analysts Adam Posen from the Peterson Institute for International Economics and Peter R. Orszag from Lazard, several powerful factors could significantly hinder the Federal Reserve’s ability to lower interest rates.

BTC is currently trading at $88.28K with a daily decrease of 0.79%, reflecting increasing volatility amid uncertainty regarding the Fed’s monetary policy.

What lies behind the forecast of rising inflation in the US

Posen and Orszag highlight four key factors that could outweigh the factors pushing prices down. The administration’s tariff policy, in their assessment, will create a long-lasting effect of increased costs. Importers typically pass on expenses to consumers with a delay, which means: although short-term inflation spikes may be smoothed out, by mid-2026, the accumulated effect will add about 50 basis points to the core inflation rate.

The labor market situation is also tightening. Proposed deportations could cause a labor shortage in industries dependent on migrants, leading to wage increases and boosting demand-driven inflation. Additionally, government spending could increase the US fiscal deficit above 7% of GDP, and easing financial conditions amid unstable inflation expectations will further raise prices.

Why the forecast threatens crypto bulls on cheap money

If inflation in the US indeed recovers, the Fed will face a dilemma: aggressively cut rates or act more cautiously. Cryptocurrency supporters expected rapid rate cuts of 50-75 basis points in 2026, counting on the continuation of last year’s deflationary trend, when the official consumer price index fell to a 2.7% low since 2020.

The resurgence of inflation in the US will disappoint this part of the market. Higher rates make risky assets—stocks and cryptocurrencies—less attractive. The yield on 10-year US Treasury bonds is already rising, reaching a five-month high of 4.31% this week, signaling that investors are reassessing risk and the cost of money.

The contrast between expectations and reality

Interestingly, Bitunix analysts expressed opposite concerns: the real risk lies not in excessive easing of policy, but in excessive caution. They note that if structural inflation reduction driven by productivity growth, caused by AI development, is ignored, the Fed may later make sharper and destabilizing adjustments.

Nevertheless, this logic may prove overly optimistic. Investments in AI technologies are substantial—Microsoft and Meta continue to accelerate spending on artificial intelligence without signs of slowing down. Meta even forecasts a sharp increase in capital expenditures in 2026. However, it remains unclear whether these investments can offset inflationary pressures from tariffs, labor market tensions, and massive fiscal deficits.

The prospect of inflation resurgence in the US casts doubt on the main argument of crypto bulls on cheap money and calls for a reassessment of the risk-return profile of decentralized assets in a more aggressive monetary policy environment.