Crypto World

IMF: US Inflation Won’t Hit Fed Target Until 2027, Delaying Rate Cuts

Published

3 weeks ago

26 February 2026

IMF: US Inflation Won't Hit Fed Target Until 2027, Delaying Rate Cuts

The International Monetary Fund said Wednesday that US inflation will not return to the Federal Reserve’s 2% target until early 2027.

The assessment, part of the IMF’s first Article IV review of the Trump administration, signals that meaningful rate relief remains distant despite the president’s optimism.

IMF Flags Fiscal Risks

IMF Managing Director Kristalina Georgieva told reporters the US current account deficit is “too big.” The Fund estimates it at 3.5% to 4% of GDP in the near term.

But the IMF’s prescription clashes with the administration’s approach. Nigel Chalk, the Fund’s Western Hemisphere Director, said fiscal consolidation — not tariffs — is the best path to narrowing the deficit. The recommendation comes after the Supreme Court struck down Trump’s broad emergency tariffs as illegal, forcing the administration to invoke Section 122 of the Trade Act of 1974 for replacement levies.

The fiscal picture is stark. The IMF projects US federal deficits will remain between 7% and 8% of GDP in the coming years. That is more than double the levels targeted by Treasury Secretary Scott Bessent. Consolidated government debt is on track to reach 140% of GDP by 2031.

“The upward path for the public debt-GDP ratio and increasing levels of short-term debt-GDP represent a growing stability risk to the US and global economy,” the Fund warned.

Trump’s Rate Optimism vs. Structural Reality

The IMF review landed one day after Trump’s State of the Union address, where the president painted a rosy picture on borrowing costs. He claimed mortgage rates had hit four-year lows and that annual mortgage costs had dropped nearly $5,000 since he took office. He framed lower rates as the solution to what he called the “Biden-created housing problem.”

Yet the IMF’s numbers tell a different story. With inflation not reaching the Fed’s target until 2027 and fiscal deficits running at twice the administration’s own goals, the structural case for higher-for-longer rates is strengthening. The Fund pegged 2026 US growth at a resilient 2.4%, leaving the Fed little urgency to ease.

What It Means for Crypto

The implications for risk assets are clear. Sticky inflation and an expanding fiscal deficit reduce the probability of aggressive rate cuts this year. For crypto markets, which rallied on rate-cut expectations through late 2025, the IMF’s assessment reinforces caution.

The deeper irony is that the administration’s own fiscal expansion — including what the IMF notes are historically large tax cuts — is the primary driver of the deficit that keeps rates elevated. Trump wants lower rates but is pursuing policies that structurally prevent them.

The IMF stopped short of predicting a crisis, noting that “the risk of sovereign stress in the US is low.” But the trajectory it describes — rising debt, persistent deficits, delayed disinflation — points to an environment where rate relief comes slowly, if at all.

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Crypto World

Trump White House Proposes National AI Framework, Urges Federal Standard

Published

5 minutes ago

20 March 2026

NewsAdmin

Trump White House Proposes National AI Framework, Urges Federal Standard

The Trump administration has released a national AI legislative framework for the United States, calling on Congress to establish a unified federal framework and warning that a patchwork of state laws could hinder innovation and competitiveness.

The framework is structured around six core policy areas: protecting children and empowering parents, strengthening communities, intellectual property and creator rights, free speech protections, accelerating AI innovation and workforce development.

At the center of the proposal is a push for a unified federal approach, with the administration urging Congress to preempt state-level AI laws it says could burden developers.

“Congress should preempt state AI laws that impose undue burdens,” the framework states, warning that “a patchwork of conflicting state laws would undermine American innovation and our ability to lead in the global AI race.”

The framework also calls for fewer barriers to AI deployment, regulatory sandboxes and expanded access to federal datasets, while opposing the creation of a new dedicated AI regulator.

On intellectual property, the proposal states:

Although the Administration believes that training of AI models on copyrighted material does not violate copyright laws, it acknowledges arguments to the contrary exist and therefore supports allowing the Courts to resolve this issue.

It also ties AI expansion to energy policy, urging faster permitting for data centers and support for on-site power generation, while saying residential ratepayers should not bear the cost of new infrastructure.

Additional measures include tools to protect minors online, efforts to combat AI-enabled fraud and workforce training initiatives aimed at preparing workers for AI-driven shifts.

The framework is nonbinding and will require Congressional action to be enacted.

Layoffs begin to mount as AI adoption accelerates across crypto

While the White House framework emphasizes workforce development and job creation in an AI-driven economy, it does not address the risk of job displacement as adoption accelerates across industries.

That shift has already become visible in the crypto sector, where companies are rapidly integrating AI across operations. Over the past two months, a growing number of fintech and crypto companies have reported layoffs.

In February, Jack Dorsey’s payments company Block said it would cut roughly 40% of its workforce, with the co-founder pointing to the rapid use of AI tools as a key driver behind the restructuring.

More recently, blockchain data provider Messari announced layoffs alongside a leadership change, as the company pivots toward an AI-first strategy following an earlier round of cuts in 2025.

The trend continued this week, with Crypto.com saying it plans to cut up to 12% of its workforce as it integrates AI across its operations. On Thursday, CEO Kris Marszalek warned on X that “companies that do not make this pivot immediately will fail.”

Volatility in the crypto market has also led to staff reductions. On Wednesday, the Algorand Foundation said it would cut about 25% of its workforce, citing broader market downturns and macroeconomic uncertainty.