US President Donald Trump delivered his longest speech of the recent period in his State of the Union speech, in which he evaluated the country’s economic and political outlook. In the speech, where topics such as tax policies, artificial intelligence, housing sector and health services came to the fore, digital assets and the cryptocurrency sector were not included.
Trump Family and Crypto Relationship
Trump’s family was also present in the hall during his speech. The President’s sons, Donald Jr. and Eric Trump are known among the names actively working in the cryptocurrency industry. Although this activity of the Trump family, which participates in different digital asset projects and token initiatives, is known, the President’s speech did not include any message about the sector. Moreover, Trump had previously talked about his goal of making the USA the “crypto center of the world”.
Trade Policies, Inflation and Central Bank Steps
Although the crypto space was not directly discussed in the speech, macroeconomic topics that would affect financial markets were dominant. While Trump described the US Supreme Court’s annulment of the emergency tariff plan as “quite sad”, he stated that he would continue the tariffs through alternative legal means without a congressional decision. However, although different rates were announced during the implementation process, a tariff with a lower rate came into force in official documents. The European Union has halted the approval process of the trade agreement reached with the United States in the summer. India postponed the planned talks.
Trump’s view that tariffs can replace income taxes is considered unrealistic by economists. It was stated that, considering the 2.4 trillion dollars that the USA earned from income taxes last year, as well as the approximately 300 billion dollars from customs duties and the refund amounts to be made after the judicial decision, it does not cover the revenues. On the other hand, it was reported that importers in the USA pay the tax and foreign governments have no financial obligations.
Regarding inflation, Trump claimed that core inflation had fallen to 1.7 percent. However, it was announced that the main indicator followed by the US Federal Reserve increased to 3 percent in December and this rate remained above the targeted level of 2 percent. The Central Bank is expected to keep interest rates constant in the near term due to inflation continuing its high course and uncertainty in trade policy. The three-quarter point interest rate cuts made last year are seen as the last move for now. Thus, the high interest rate environment continued for risky assets, including crypto markets.
Exclusive Emphasis on Artificial Intelligence
While cryptocurrencies did not find any place in the conversation, the topic of artificial intelligence came to the fore. The president announced a “consumer protection commitment” program that would require tech companies to build their own power plants for data centers. He emphasized that the energy grid cannot meet the current demand. In addition, First Lady Melania Trump’s artificial intelligence regulatory efforts were also highlighted, showing that this field has become a more priority agenda item in the new period.
While Trump’s speech in record time paints an optimistic picture about the economy before the upcoming elections; It ended with signs that there is no legal momentum for crypto markets, uncertainty in trade policies continues and the Central Bank will remain on its current course.
