According to The Kobeissi Letter, long-term US inflation expectations have surged to 4.1%, the highest level since 1993, due to tariff front-running causing a $300+ billion trade deficit in two months. This economic environment could lead to increased volatility in cryptocurrency markets as investors seek inflation hedges.

According to The Kobeissi Letter, President Trump's implementation of 25% tariffs on Canada and Mexico, and 10% tariffs on China, effective at 12:01 AM ET, has led to significant economic tensions. Canada has retaliated with 25% tariffs on up to $155B CAD of US goods and a 25% tax on electricity from Ontario to the US. These actions could influence cryptocurrency markets as investors seek alternative assets to hedge against potential economic volatility.

According to @KobeissiLetter, prediction markets now forecast a base case of US inflation rising to 4.0% by 2025, as per data from @Kalshi. This signifies a substantial increase from the 2.3% inflation expectation recorded on December 1st, 2024. Additionally, there is a growing 22% probability that inflation could exceed 4.0%, indicating potential volatility in economic conditions. Traders should closely monitor these shifts, as they could impact investment strategies and interest rate expectations.