Forex Analysis & Reviews: 28.02.2025 - The Risk of U.S. Economic...

Live Chat

InstaForex Loprais Team - Official participant of the Dakar rally

This section features the most important information about trading with InstaForex. We provide both analysis from leading experts for experienced traders and articles on trading conditions for beginners. Our services will help increase your profit potential.

Become Trader

Account Opening

See also

Trading Conditions

Forex Analytics

Charts

This section is designed for those who are just starting their trading journey. InstaForex educational and analytical materials will meet your training needs. Our experts' recommendations will make your first steps to trading success simple and clear.

Start as Beginner

How to start trading

Useful information

Training and recordings

InstaForex innovative services are an essential element of productive investment. We strive to provide our clients with advanced technical capabilities and make their trading routine comfortable as we are recognized as the best broker in this regard.

Become Investor

PAMM System

ForexCopy System

Passive investments

OYS account

Partnership with InstaForex is beneficial and top-tier. Join our affiliate programs and enjoy bonuses, partner rewards, and the possibility to travel with the team of the world-renowned brand.

Become Partner

Main Page

Partner Area

Advantages for Affiliates

Registration

This section contains the most lucrative offers from InstaForex. Receive bonuses when topping up an account, compete with other traders, and get real prizes even when trading in a demo account.

All Promo Campaigns

Bonuses

Contests

Events

Holidays with InstaForex are not only pleasant but also useful. We offer a one-stop portal, numerous forums, and corporate blogs, where traders can exchange experiences and become successfully integrated into the Forex community.

Full details

Forums

We are in social networks

Forex humour

Forex Portal

InstaForex is an international brand created in 2007. The company provides services for online FX trading and is recognized as one of the world's leading brokers. We have won the trust of more than 7,000,000 retail traders, who have already appreciated our reliability and focus on innovations.

Learn More

History

Why Choose Us

InstaSport

Regulation

Company News

Awards

InstaForex Stars

InstaForex Offline

Headquarters

Key documents

Social Responsibility

InstaForex Loprais Team - Official participant of the Dakar rally

28.02.2025 10:34 AM

The Risk of U.S. Economic Stagflation Resurfaces (Potential Decline in Bitcoin and Rise in #USDX)

Earlier reports indicated that the U.S. president had decided to delay the implementation of tariffs on Canada and Mexico from March 4 to April 2, providing a temporary sense of relief to global financial markets. However, yesterday's news once again sent shockwaves through the markets.

On Thursday, Donald Trump reaffirmed his plans to impose a 25% tariff on imports from Mexico and Canada, which will take effect on March 4 without further delay, alongside an additional 10% tariff on Chinese goods. This announcement caused a sharp reversal in the U.S. dollar, which gained strong support against a basket of major currencies on the Forex market. Meanwhile, gold prices and stock indices accelerated their declines, along with cryptocurrency assets, which suffered further losses.

Are Tariffs the Only Reason for the Market's Downturn?

Unfortunately, no. In addition to the escalation of trade wars, U.S. economic data has also weighed heavily on market sentiment. The latest reports on core durable goods orders and total orders volume were mixed, failing to instill confidence in a stronger economic recovery.

Revised Q4 GDP figures confirmed a slowdown in economic growth from 3.1% to 2.3%, aligning with forecasts. However, the most concerning data came from the Core Personal Consumption Expenditures (PCE) Price Index for Q4 2024, which surged from 2.2% to 2.7%, exceeding the 2.5% forecast. The headline PCE also rose from 1.5% to 2.4%, surpassing expectations of 2.3%. While the monthly figure remained flat at 0.0%, compared to a forecasted increase of 0.25% from 0.1%, the overall inflationary trend left a negative impression on investors.

Essentially, these figures suggest that inflation is rising despite an economic slowdown, reinforcing fears of stagflation—a scenario that could be detrimental to the import-dependent U.S. economy.

Key Focus: Upcoming U.S. PCE Inflation Data

Today, market attention will turn to the annual and monthly PCE price index readings from the U.S., which are closely watched indicators of inflation. These figures are typically more relevant than quarterly data due to their freshness and immediate impact on monetary policy expectations.

Consensus forecasts suggest:

Annual PCE Inflation is expected to decline to 2.6% from 2.8%.
Monthly PCE Inflation is projected to increase from 0.2% to 0.3% in January.

Market Expectations

If the PCE data meets or exceeds expectations, market sentiment will likely remain negative, reinforcing trends in favor of:

A stronger U.S. dollar
Increased demand for U.S. Treasuries as a safe-haven asset amid concerns over a potential stagflationary downturn in the U.S. economy.

Daily Forecasts

Bitcoin (BTC/USD)

The sharp decline in Bitcoin continues amid widespread market negativity. The next downward target is $73,485, with further losses possible if PCE data signals rising U.S. inflation.

U.S. Dollar Index (#USDX)

The Dollar Index is testing key resistance at 107.35. Given overall market sentiment, the upward trend is likely to persist. A break above resistance could push USDX towards 108.40 early next week.

You have already liked this post today

*Disclaimer: The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.

If you have any content questions, please contact editorial-board@instaforex.com

# USD # Bitcoin # BTCUSD Fundamental analysis