Trump Tariffs: Crypto Traders Increase Bets On Supreme Court Ruling as Cooling Inflation Fuels Rate Cut Hopes

Cryptocurrency traders are increasing their wager that the Supreme Court would approve Trump’s tariff authority. Meanwhile, cooling inflation is enhancing prospects of future rate reduction further improving risk-market sentiment.

Will the Supreme Court Support Trump’s Tariffs?

The odds rose to 36% on the Kalshi prediction market. In recent days, the probability improved 10 points compared to approximately 26% earlier in December.

The number of trades totaled to $1.76 million with more trades being taken by bettors. At the beginning of December, the odds were in the low twenties but they have recently gone up.

Challenges to the tariffs introduced by Trump continue to increase in multiple courts. The constitutional authority of trade policies is being challenged through lawsuits.

However, the participants in the prediction market are starting to believe that the Court will support the administration. This will align with Trump’s interest as he recently claimed that his tariff plans will create great wealth for U.S. citizens.

The tariff dispute is viewed by many traders as one of the significant legal impetuses that may have an impact on the national economy. The decision made by the Court will determine the extent of the president’s authority in trade matters.

Market Shifts in Hopes of a Rate Cut

Nevertheless, the implied probability of the ‘No’ option is 64% and this shows that there is still a majority bet on ruling against Trump’s tariff authority.

The new 10-point increase indicates the speed at which sentiment may change when there is new information. The Court has not fixed a date of ruling yet.

Still, any new development has the potential to change sentiments immediately as markets respond to filings and developments. The results of the tariff decision by the court may change the global trade patterns and the economic growth in the U.S. They may also have a direct influence on the prices and sentiment of the cryptocurrencies.

Cryption markets are usually responsive to regulation and politics. The latest FOMC minutes show that the officials favor further rate cuts as inflation decreases.

The increase in market odds comes at the same time of new inflation data. The U.S. CPI index on inflation dropped to 1.99% per annum. It is the first period in years when the market has dropped beneath the 2% target of the Fed.

Will A Cooling Inflation Accelerate Rate Cuts?

The reduction of inflation is also increasing the anticipation of reduction in rates by 2026. Officials in the Fed like Stephen Miran are also suggesting further rate cuts to improve economic growth in the U.S.

Risk assets such as cryptocurrencies and stocks typically receive more inflows when costs of borrowing are low. The decrease in inflation causes a significant reduction in risks for traders.

This change is an indicator of an increase in trust in policy trades with economic conditions becoming better. Future economic data might support the rate cut expectations and affect the digital asset market.