Inauguration 2025: Trump’s Leadership and a Thriving Economy
A look ahead.
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Donald Trump is set to take office for his second term, inheriting an economy that’s performing well by most metrics. But by all indications, Trump isn’t one to rest on his laurels—he’s already outlined attention-grabbing plans to improve economic resilience, tackle trade imbalances, and put American interests first.
His administration is poised to shake things up in ways that could strengthen the U.S.’s economic position while addressing challenges like inflation and geopolitical uncertainty.
The latest data reinforces the foundation he’s stepping into. First-time unemployment claims dropped to an 11-month low last week, with only 201,000 new filings—well below expectations of 218,000. November’s JOLTS report showed job openings continuing to rise, now making up 4.8% of the labor force.
Average hourly wages are climbing at an annual rate of 4%, comfortably outpacing inflation, and December’s jobs report shows 256,000 new jobs were added, significantly above the 155,000 expected, while unemployment dropped to 4.1%.
Still, markets aren’t fully on board with the rosy picture. Traditional markets saw a turbulent week, with rising bond yields stoking inflation fears. The Federal Reserve’s December meeting minutes revealed a reluctance to continue rate cuts in 2025, partly due to Trump’s proposed tariffs. These tariffs, designed to protect American industries, are being viewed cautiously by investors, who worry about higher consumer costs.
Crypto markets had a rough week, with Bitcoin dropping nearly 7%, driven more by broader risk-off sentiment in traditional markets than any specific regulatory developments. The Fear & Greed Index swung toward “Fear” as traders responded to heightened inflation concerns, rising bond yields, and uncertainty surrounding Trump’s tariff plans.
While the incoming administration is expected to favor lighter oversight of the crypto space, the recent sell-off highlights how sensitive the market remains at this stage (which many still consider to be early) to macroeconomic factors and broader investor sentiment.
Meanwhile, Trump’s foreign policy remarks have caused quite a stir. His recent suggestions about renaming the Gulf of Mexico to the "Gulf of America" sparked sharp responses from international leaders; Denmark, alongside France and Canada, rebuked Trump’s comments on issues ranging from potential U.S. expansion into Greenland to potential military involvement in Panama, citing the need to secure U.S. interests, and pressured Canada to join a proposed North American union.
These statements have added uncertainty to an already tense geopolitical landscape, leaving investors wondering how Trump’s policies will impact global markets and trade relationships.
At home, Trump’s plans for regulatory reform are making waves. Federal Reserve Vice Chair Michael Barr is stepping down, opening the door for Trump to install leadership more aligned with his administration’s priorities.
On the legislative side, Senator Lummis and Representative Steil are poised to lead crypto-focused subcommittees, while the CFTC awaits new leadership. These changes have the potential to bring clarity to financial and crypto regulation, but for now, they remain an open question.
Trump enters his second term with bold ambitions and a strong economic foundation. Whether he can turn plans into action while navigating inflation risks, market volatility, and international tensions will define the early days of his administration. Investors will be watching closely to see how his leadership shapes the economy’s next chapter.
Here’s a summary of what to look out for in crypto and macro changes, as we head into 2025 under a new regime, with new rules:
Highlight Reel: What to Expect from Trump in 2025 on Crypto and Macroeconomics
Tax Reform
Trump proposes reducing the corporate tax rate to 15% for manufacturers, implementing a 10% middle-class tax cut, and exempting Social Security income from federal taxes. These measures are designed to enhance U.S. competitiveness and provide taxpayer relief but may significantly increase the national debt. (FactCheck.org)Deregulation Agenda
Trump is expected to push for deregulation in the financial and banking sectors, with potential appointees signaling a lighter regulatory approach. Supporters see this as a way to unlock capital for investment, while critics warn of financial stability risks. (WSJ, NY Post)Federal Reserve Policy
Trump's approach involves appointing Federal Reserve officials who prioritize economic growth and favor low interest rates. This strategy could support short-term market expansion but raises concerns about potential long-term inflation. (Yahoo Finance)Dollar Policy
Trump’s stance on the U.S. dollar varies; he may advocate for a stronger dollar to attract investment or a weaker dollar to boost export competitiveness, aligning with his broader economic objectives. (EconoTimes)Bitcoin and Cryptocurrency Policy
Trump has indicated support for cryptocurrency, proposing the creation of a federal Bitcoin reserve and advocating for streamlined regulations to position the U.S. as a leader in blockchain technology, countering international competition. (Ars Technica)Trade and Tariffs
Trump’s trade policy includes a proposed 10% universal import tariff, with higher rates targeting specific countries such as China. While intended to boost domestic manufacturing, this strategy could lead to higher consumer prices and increased global trade tensions. (FactCheck.org)Infrastructure Spending
Trump proposes a $2 trillion infrastructure investment focusing on roads, bridges, and 5G networks, alongside increased defense spending. Public-private partnerships are expected to play a significant role in funding, though concerns about the impact on the national debt persist. (Syracuse University)Monetary Policy and Global Capital Flows
Trump’s policies could reshape global capital flows, influencing the carry trade and international investments. Emphasis on domestic economic growth may lead to shifts in global financial dynamics. (Fact Lenses)Regulating Crypto Exchanges
Following recent controversies in the cryptocurrency sector, Trump is likely to support stricter oversight of crypto exchanges to protect U.S. investors and increase industry accountability. (TheStreet)DOGE and Spending Cuts
Trump has announced the creation of the Department of Government Efficiency (DOGE), led by Elon Musk and Vivek Ramaswamy, aiming to reduce federal spending by eliminating waste and streamlining operations. Initially, Musk proposed cutting $2 trillion from the federal budget but has since acknowledged that achieving a $1 trillion reduction is a more realistic goal. (Reuters)
This Week By the Numbers 📈
🤖 AI & Tech
💼 Business & Finance
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🏛️ Politics & Policy
Top Stories 🗞️
Devastating fires in Southern California could be costliest in US history
A preliminary estimate of the financial impact of the Los Angeles blazes ranks the incident among the costliest ever natural disasters in the US, and likely the nation’s most expensive ever wildfire.
Blazes burning around Santa Monica and Malibu are consuming some of the most pricey real estate in the US, affecting areas where the median home value is more than $2 million, according to AccuWeather Inc. The disaster will likely cause between $52 billion to $57 billion in damage and economic loss, the company said.
In addition to the human costs and property damage in Los Angeles, there will likely be longer-lasting health impacts due to acrid smoke, as well as a dent in the region’s lucrative tourism business, AccuWeather said.
Trump sentenced to penalty-free 'unconditional discharge' in hush money case
The New York judge who presided over Donald Trump’s hush money case on Friday sentenced the president-elect to an “unconditional discharge,” meaning he is now a convicted felon in the eyes of New York state law but will face no further penalties.
"This has been a very terrible experience," a dour Trump said, speaking remotely from his Florida home when allowed to address the judge.
“It was done to damage my reputation so I would lose the election,” he said. "I am totally innocent. I did nothing wrong," he maintained.
The sentencing came just 10 days before Trump is set to be sworn in as the country’s 47th president.
Biden administration ignites firestorm with rules governing A.I.’s global spread
The next big fight over offshoring is playing out in Washington, and this time it involves artificial intelligence.
The Biden administration, in its final weeks in office, is rushing to issue new regulations to try to ensure that the United States and its close allies have control over how artificial intelligence develops in the years to come.
The rules have touched off an intense fight between tech companies and the government, as well as among administration officials.
The rules would allow most European countries, Japan and other close U.S. allies to make unfettered purchases of A.I. chips, while blocking two dozen adversaries, like China and Russia, from buying them. More than 100 other countries would face different quotas on the amount of A.I. chips they could receive from U.S. companies.
Meta to end fact-checking, replacing it with community-driven system akin to Elon Musk's X
Meta CEO Mark Zuckerberg on Tuesday said the social media company is ending its fact-checking program and replacing it with a community-driven system similar to that of Elon Musk's X.
Zuckerberg cited the outcome of the 2024 U.S. presidential election as underlying the decision, calling it a "cultural tipping point towards, once again, prioritizing speech." Zuckerberg made the announcement in a video. "We're going to get rid of fact-checkers and replace them with community notes similar to X, starting in the U.S."
The changes will impact Meta platforms Facebook and Instagram — which have billions of users — as well as Threads.
The systems put in place to moderate its platforms make too many mistakes, Zuckerberg stated.
"Meta is repositioning the company for the incoming Trump administration," Jasmine Enberg, principal analyst at research firm Emarketer, said in an email. "The move will elate conservatives, who've often criticized Meta for censoring speech, but it will spook many liberals and advertisers, showing just how far Zuckerberg is willing to go to win Trump's approval."
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Tatiana Koffman & Katherine MacLellan
About the Author: Tatiana Koffman
Hi there and thanks for reading! If you stumble upon my newsletter, you will notice that I write about money, economics, and technology. I hold a JD/MBA and spent my career in Capital Markets working across Mergers & Acquisitions, Derivatives, Venture Capital, and Cryptocurrencies. I write to make financial topics more accessible and create equal opportunity for the next generation of investors. Currently working as a proud General Partner at Moonwalker Capital.
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About the Author: Katherine MacLellan
Katherine holds an MA (Hons) in Economics and International Relations from the University of St. Andrews, and a JD from Osgoode Hall. She has been thinking and writing about Bitcoin and blockchain technology since 2012.