Trump’s Security Strategy: Rising Yields Bolster Gold, Challenge Bitcoin
The White House’s new National Security Strategy signals a shift toward global fiscal expansion, posing potential headwinds for crypto markets hoping for swift interest rate cuts.
President Donald Trump emphasizes an “America First” agenda, calling on NATO allies to raise defense spending to 5% of GDP and urging Japan and South Korea to increase military budgets. The plan also strengthens the U.S. military presence in the Western Pacific while encouraging Taiwan and Australia to boost spending.
Financing these initiatives may drive higher borrowing, bond yields, inflation, and capital costs, limiting central banks’ ability to cut rates. Slower labor inflows could keep wages sticky, adding inflationary pressure.
These conditions favor safe-haven assets like gold, up 60% this year, while Bitcoin—marketed as “digital gold”—has struggled, down nearly 5% year-to-date. The Federal Reserve is expected to cut rates by 25 basis points to 3.5%, but more aggressive reductions appear unlikely.
