Decline in Consumer Confidence and Easing of Cryptocurrency Restrictions
The recent period has witnessed significant developments in the economic and financial landscape of the United States.
Consumer confidence has declined notably amid rising concerns over inflation and unemployment.
Meanwhile, authorities have eased restrictions on banks’ dealings with cryptocurrencies to support the financial sector.
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Inflation
Decline in U.S. Consumer Confidence Amid Rising Inflation and Unemployment Expectations
Consumer confidence in the United States dropped for the first time in six months in January as concerns over inflation
and unemployment escalated.
According to data released by the University of Michigan on Friday,
the Consumer Sentiment Index fell by 3.9% month-over-month to 71.1 points,
compared to 74 points in December and below the preliminary reading of 73.2 points.
Additionally, the Current Economic Conditions Index declined by 1.5% to 74 points,
while the Future Expectations Index dropped by 5.5% to 69.3 points.
The data also showed that consumers’ inflation expectations for the next 12 months rose to 3.3%,
up from 2.8% in December, marking the highest level since May 2024.
Long-term inflation expectations also increased to 3.2% from 3%.
The findings indicated that new administration policies, such as imposing tariffs,
have heightened inflation concerns, prompting consumers to accelerate purchasing decisions to avoid anticipated price increases.
Cryptocurrencies
The U.S. Eases Restrictions on Banks’ Dealings with Cryptocurrencies
The U.S. Securities and Exchange Commission (SEC) has eliminated an accounting rule that required banks to treat Bitcoin and other cryptocurrencies as financial liabilities on their balance sheets.
This move aims to ease restrictions imposed on the cryptocurrency industry.
Hester Peirce, a newly appointed commissioner heading a task force to develop a comprehensive regulatory framework for digital assets within the SEC, praised the decision, emphasizing that it removes a significant obstacle for banks to engage with cryptocurrencies.
The repealed rule posed challenges for major banks,
as it increased financial and regulatory risks associated with safeguarding digital currencies and raised operational costs.
Consequently, many banks had avoided the cryptocurrency market.
This decision is part of a series of measures implemented by former President Donald Trump’s administration to facilitate the integration of digital assets into the financial sector.
Decline in Consumer Confidence and Easing of Cryptocurrency Restrictions