According to Compounding Quality on Twitter, fiscal policy refers to how a government leverages taxes and spending to influence economic conditions, which can directly affect unemployment and inflation levels (source: Compounding Quality, June 9, 2025). For crypto traders, changes in fiscal policy can signal shifts in liquidity and market sentiment, as government spending or tightening can alter the risk appetite for digital assets. For example, expansive fiscal measures often lead to increased liquidity, potentially boosting cryptocurrency prices, while austerity policies may tighten market conditions and pressure crypto valuations.

According to Mihir (@RhythmicAnalyst), February's Personal Consumption Expenditures (PCE) report indicates that the Trump administration faces a critical task of controlling inflation within a month. The report suggests that if inflation is not managed promptly, it could impact market stability as April's data release approaches at the end of May. This situation underscores the importance for traders to monitor inflation-related indicators closely and prepare for potential market volatility.