Peterson Institute sees US inflation in the 4% range this year…“Rate-cut odds ↓”

US consumer inflation could exceed 4% this year, according to a new projection.

According to CoinDesk on the 22nd (local time), the Peterson Institute for International Economics (PIIE) said in a recent report that US inflation this year could come in higher than expected, in the 4% range. PIIE said that “tariffs imposed by US President Donald Trump and labor-market rigidities could offset productivity gains and stoke inflation,” adding that “importers, in particular, may pass through tariff-driven cost increases to end consumers with a lag, potentially lifting the consumer price index inflation rate by 50bp (basis points) through midyear.”

If US inflation picks up as projected, the likelihood of rate cuts would inevitably diminish. In a recent Reuters survey of 100 economists, 58% of respondents said the US Federal Reserve (Fed) would keep its policy rate unchanged throughout the first quarter.

If the pace of rate cuts slows, risk appetite for assets such as cryptocurrencies is likely to cool. CoinDesk reported that “as global bond yields rise, the appeal of risk assets such as cryptocurrencies is declining,” and that “an upswing in inflation will disappoint risk-asset investors who had been betting on rapid rate cuts after last year’s disinflation trend.”