US inflation outlook surges, creating variables in Bitcoin investors' expectations

In 2026, a new risk factor has emerged in the Bitcoin market. According to the latest analysis by the Peterson Institute for International Economics and Lazard, the possibility that U.S. inflation will exceed 4% this year is casting doubt on the disinflation scenario that the cryptocurrency community has been 기대ing. This also puts a brake on the Fed’s aggressive rate cut expectations and is weighing on risk assets overall, including Bitcoin.

Factors Contributing to Rising U.S. Inflation: Policy Changes and Structural Elements

Economists are paying attention to the multi-layered causes of U.S. inflationary pressures. Adam Posen, director of the Peterson Institute for International Economics, and Peter Orszag of Lazard, in their recent analysis, predicted that several factors will interact complexly.

First, the impact of tariff policies is direct. Tariffs imposed on imports are absorbed by importers in the short term but are gradually passed on to consumer prices over time. The researchers expect that by mid-2026, these delayed price transmission effects will be significantly reflected, adding about 50 basis points to headline inflation through the middle of the year.

Tightening labor markets also exert upward pressure on prices. If potential immigrant deportations proceed, they could lead to labor shortages in certain industries, resulting in wage increases and demand-driven inflation. Simultaneously, large fiscal deficits and eased financial conditions are increasing the likelihood that the U.S. fiscal deficit will expand to over 7% of GDP.

The key point is that these factors are expected to outweigh downward pressures such as productivity gains from AI and declining housing inflation. While in the past, productivity increases and housing cost relief were expected to suppress inflation, the likelihood that policy variables will overwhelm these factors is growing.

Limited Options for the Fed: Uncertainty Surrounds Rate Cut Prospects

If U.S. inflation remains higher than expected, it will directly influence the Federal Reserve’s monetary policy decisions. High inflation makes it difficult for the Fed to cut the benchmark interest rate as aggressively as the market expects.

Market analysts predict that the Fed will cut the benchmark rate by 50–75 basis points this year. However, risk asset bulls, including cryptocurrency investors, had been expecting more aggressive rate cuts. The gap between these expectations and reality is weighing on high-risk assets, including Bitcoin.

Recent trends in soaring Treasury yields reflect this. Last week, the 10-year U.S. Treasury yield hit 4.31%, the highest in five months, signaling inflation concerns in the bond market. Currently, Bitcoin is trading around $88,350, down 0.85% in the past 24 hours.

Dilemma for Cryptocurrency Bulls: Rising Policy Risks

The dilemma faced by Bitcoin and cryptocurrency investors is the uncertainty surrounding policy directions. One crypto analysis firm pointed out, “The real policy risk is not about easing too early, but about acting too cautiously even after structural disinflation has been established.” This reflects concerns that the Fed might make policy mistakes.

If U.S. inflation expectations materialize, the existing assumptions of crypto investors will be shaken. The logic that the value of unprofitable assets like Bitcoin rises in a low-interest-rate environment becomes weaker. When interest rates remain high, the relative attractiveness of holding cash or bonds increases.

Currently, the Bitcoin market already reflects this uncertainty. As pressure to raise rates intensifies, the overall risk asset market is likely to weaken further, indicating a different trajectory from what Bitcoin bulls had anticipated.