President Donald Trump’s victory in the 2024 US presidential election was the most significant crypto market catalyst for 4Q24, driving bitcoin prices 4-5 standard deviations higher (compared to the three month average). But looking ahead, we think the short-term fiscal policy reaction will not be as meaningful as the long-term direction for monetary policy, particularly as we’re coming to a crucial moment for the Federal Reserve. Separating the two may not be so easy, however. We expect the Fed to continue easing in 2025, but the pace may depend on how expansionary the next set of fiscal policies will be. That’s because tax cuts and tariffs could contribute to higher inflation, and while headline CPI has fallen to 2.7% YoY, core CPI still lingers near 3.3%, above the Fed’s target.