US Treasury Secretary Bessent: Don't want to decouple with China, want to de-risk

💡 DMK Insight

Bessent’s optimism on inflation could shift market sentiment significantly. If inflation does indeed trend back toward the Fed’s 2% target by mid-year, we might see a more hawkish stance from the Fed, which could impact interest rates and the dollar. Traders should keep an eye on the USD’s performance against major pairs, especially if we see a breakout above key resistance levels. This could also ripple through the crypto markets, where a stronger dollar typically pressures prices. However, skepticism remains—historically, inflation forecasts have been overly optimistic. If inflation doesn’t cool as expected, we could see volatility spike, especially in equities and commodities. Watch the upcoming economic indicators closely, particularly CPI data, as they could provide clues on whether Bessent’s outlook holds water. The next few months will be crucial for positioning ahead of potential Fed policy shifts.