Author: Ignacio Teson

Ignacio Teson is an Economist and Financial Analyst. He has more than 7 years of experience in emerging markets. He worked as an analyst and market operator at brokerage firms in Argentina and Spain.

Powell Expects Inflation to Rise in Coming Months Amid Tariff Pressures

Posted on by Ignacio Teson

U.S. Federal Reserve Chair Jerome Powell said the central bank expects an uptick in inflation over the coming months, and suggested that if not for President Donald Trump’s trade policy, interest rates would likely have been cut already this year.

Speaking at the annual central banking forum hosted by the European Central Bank, Powell said the Fed is anticipating “somewhat higher inflation readings over the summer.” However, he clarified: “If you strip out tariffs for a second, you’ll see inflation is essentially behaving as we expected.”

When asked directly whether the Fed would have cut rates if Trump’s reciprocal tariffs hadn’t been implemented, Powell replied: “I think that’s right. We paused when we saw the size of the tariffs and how virtually every U.S. inflation forecast increased materially as a result.”

Given that, Powell added, “As long as the U.S. economy remains in a solid position, the most prudent course of action is to wait, learn more, and assess the potential effects.”

Key Question

Asked whether July would be too soon to consider a rate cut, Powell said he couldn’t say yet, emphasizing that decisions will be data-dependent. However, he did confirm that “a solid majority of the FOMC [Federal Open Market Committee] participants” expect to resume rate cuts later this year.

“That, of course, depends on the incoming data we’ll be watching closely—particularly inflation, both seen and unseen, and developments in the labor market,” he added.

Clashing With Trump

During the event, questions inevitably turned to President Trump’s repeated criticism of the Fed—and of Powell personally—for refusing to cut rates in line with the administration’s demands.

“I’m very focused on doing my job,” Powell responded. “What matters is using our tools to meet the objectives Congress has assigned us: maximum employment, price stability, and financial stability. That’s 100% where our focus is.”

Powell, whose term ends in May 2026, declined to say whether he would seek a second term.

Bitcoin retreats from $107,000 amid fiscal and trade tensions in the U.S.

Posted on by Ignacio Teson

Amid heightened global tension over stalled tariff negotiations, Bitcoin is pulling back, moving away from a key support level after gaining more than 2% in June.

The leading cryptocurrency is starting the month with a moderate round of profit-taking. On Tuesday, Bitcoin is down about 0.1%, trading below $107,000, according to Binance. The decline comes amid growing investor caution due to rising uncertainty on both the global trade and U.S. fiscal fronts.

Risk appetite is being dampened primarily by uncertainty surrounding international tariff negotiations. The upcoming July 9 deadline for reaching new trade agreements with the United States is keeping markets on edge. Adding to investor concerns is President Donald Trump’s proposed fiscal bill, which has raised fears over a potentially higher deficit and risks to public debt sustainability.

This pullback is not limited to Bitcoin. Ether, the second-largest cryptocurrency by market cap, is down 0.2%, while Toncoin and Avalanche are posting the largest losses, dropping 3.4% and 2.9%, respectively.

[[BTC/USD-graph]]

Quarterly Performance – Q2

Despite the correction, cryptocurrencies are still showing positive quarterly performance, having posted gains for three consecutive months—though June was the weakest. The crypto market continues to demonstrate versatility in varying macro environments: it shows risk aversion when equities rise but also serves as a hedge against weakness in traditional currencies.

Bitcoin’s 2.8% gain in June is in line with its historical monthly average of around 2%. Analysts are now expecting a typical summer consolidation phase in the Northern Hemisphere, with tighter trading ranges, though markets remain sensitive to macroeconomic surprises.

Stablecoin Performance

Between January 2023 and February 2025, stablecoins processed more than $94.2 billion in global payments.

Stablecoins are no longer a niche innovation—they are rapidly evolving into a core component of the global payments infrastructure, said Javier García de la Torre, CEO of Binance Spain. “From business-to-business transactions to remittances and international trade, this technology offers a faster, cheaper, and more inclusive alternative,” he noted.

The report highlights that in May 2025, the total market capitalization of stablecoins reached $239 billion, a significant jump from just $10 billion in 2020. Today, more than 150 million blockchain addresses hold stablecoins, and nearly 10 million of them conduct transactions daily.

Business-to-business payments lead the use of these digital assets, with an annual volume of $36 billion—surpassing even peer-to-peer transfers, card payments, and business-to-consumer transactions.

Mexican Peso Rises Against the Dollar for Sixth Straight Session

Posted on by Ignacio Teson

Although the peso began the year under pressure from President Donald Trump’s trade policies, improving investor sentiment has helped it reach its strongest level in 10 months.

The Mexican peso appreciated against the U.S. dollar at the start of the week, marking its sixth consecutive session of gains and closing its best quarter since 2020. Investors remained focused on trade negotiations between the U.S. and its key partners.

The exchange rate ended the session at 18.7654 pesos per dollar, compared to 18.8529 on Friday, according to official data from the Bank of Mexico (Banxico). That represented an appreciation of 8.75 centavos, or 0.46%.

The dollar traded within a range of 18.8994 (high) and 18.8002 (low). Meanwhile, the U.S. Dollar Index (DXY), which measures the greenback against a basket of six major currencies, fell 0.64% to 96.78.

[[USD/MXN-graph]]

Strong Q2 Performance

Traders are increasingly betting that the U.S. will announce further agreements with its main trade partners as the July 9 deadline set by President Trump approaches. Canada, for example, removed a digital services tax as a gesture of cooperation.

Amid these developments and rising expectations of Federal Reserve rate cuts, the peso extended its winning streak. From 19.1683 pesos per dollar on June 20, the currency has gained 40.29 centavos, or 2.10%.

Additional momentum came after the end of the 12-day conflict between Israel and Iran. Over the month, the peso advanced 63.03 centavos, or 3.25%, from 19.3957, driving a quarterly gain of 1.69 pesos, or 8.28%—its strongest three-month performance since 2020.

Positive Momentum Ahead

Despite starting the year weighed down by U.S. trade tensions, the peso has staged a strong recovery, and analysts now see a growing likelihood of continued appreciation.

With today’s move, the peso broke through the important 18.80 level—a key short-term support that had held in recent weeks. This opens the door for further gains, potentially targeting new yearly lows.

Technically, the exchange rate has broken below a 15-month Fibonacci support level and may now test the 18.50 zone.

Trump Renews Attacks on the Fed, Says Interest Rate Should Be at 1% or Lower

Posted on by Ignacio Teson

The U.S. Federal Reserve recently decided to keep interest rates steady within the 4.25%–4.5% range, amid persistent uncertainty about inflation dynamics in the context of the ongoing trade war.

On Monday, President Donald Trump renewed his criticism of the Federal Reserve, stating that interest rates should be at or below 1%. His remarks come as rumors circulate about a possible replacement of Fed Chair Jerome Powell.

Trump argued that Powell and the members of the Fed’s Board of Governors have failed in their responsibilities. “If they were doing their job properly, our country would be saving trillions of dollars in interest costs,” he posted on Truth Social. “We should be paying 1% interest—or better!” he added.

In its latest policy meeting, the Fed justified holding rates steady due to the lingering risk of inflation tied to the tariff war initiated by Trump. Previously, the central bank had raised rates throughout 2022 and 2023 in an effort to cool the economy and tame inflation, which had surged to a four-decade high amid the Russia-Ukraine conflict.

Now that inflation is approaching the Fed’s 2% target, Trump has ramped up his attacks on the institution, calling Powell “a fool” and “an idiot.”

[[SPX-graph]]

However, Powell testified before Congress earlier this week, reiterating that the Fed wants to wait for clearer signs in inflation and economic data before making any move to cut rates. Most Fed policymakers have echoed this cautious stance.

Markets React to Fed Speculation

In recent sessions, speculation about Powell’s possible replacement has helped boost Wall Street, as investors bet on a more dovish pivot.

Meanwhile, the Fed continues to closely monitor inflation and employment indicators. Last week, the U.S. Department of Commerce reported that prices rose 2.3% in May compared to a year earlier, up from 2.1% in April. Core inflation, which excludes food and energy, increased 2.7% year-over-year, slightly above the Fed’s 2% target and the 2.6% pace recorded the previous month.

On the labor front, initial jobless claims fell by 10,000 to a seasonally adjusted 236,000 in the week ending June 21, below economists’ expectations of 245,000. However, layoffs have been on the rise, and economists note that Trump’s broad import tariffs are making it harder for businesses to plan ahead.

Continuing claims remain elevated, leading analysts to project that the unemployment rate could rise to 4.3% in June from 4.2% in May.

U.S. Senate to Raise Debt by $3.3 Trillion While Cutting Social Subsidies

Posted on by Ignacio Teson

The U.S. Senate’s revised version of President Donald Trump’s sweeping tax bill would significantly increase the national debt while introducing deeper spending cuts.

Known as the “One Big Beautiful Bill,” the proposal includes sharp reductions in social subsidies and the elimination of tax incentives for renewable energy.

According to estimates, the Senate plan would raise the federal deficit by nearly $3.3 trillion between 2025 and 2034—almost $1 trillion more than the $2.4 trillion increase projected under the House version passed earlier this year.

By 2034, as many as 11.8 million Americans could lose their health insurance coverage if the bill becomes law, surpassing the House version’s projection of 10.9 million. These forecasts present a challenge for Republican leaders pushing to pass Trump’s bill before the July 4 Independence Day deadline.

Saturday’s Senate vote followed a day of intense negotiations and ended with a narrow 51–49 margin. Two Republican senators joined all 47 Democrats in opposing the initial motion to open debate. Vice President J.D. Vance was present at the Capitol, prepared to cast a tie-breaking vote if necessary, underscoring the high stakes of the session. The Trump administration has said it “strongly supports” the bill’s passage.

Congressional Budget Office Warns of Increased Debt

On Sunday, the nonpartisan Congressional Budget Office (CBO) released its analysis of the bill’s impact on the current $36.2 trillion national debt, estimating that it would add $800 billion more than the House version. Many Republicans disputed the CBO’s findings, arguing that extending current policy would not worsen the debt. However, international bond investors are reportedly taking note and exploring options outside of U.S. Treasuries.

Democrats hope that the CBO’s alarming projections will stir enough concern among fiscally conservative Republicans to trigger defections from within their party, which currently controls both chambers of Congress. “Republicans are doing something the Senate has never done—using fake math and accounting tricks to hide the true cost of this bill,” said Senate Minority Leader Chuck Schumer on Sunday.

The Senate voted late Saturday to advance the massive 940-page bill covering tax cuts, immigration policy, border security, and military spending. Trump is urging lawmakers to pass the bill before the July 4 holiday.

Citi Sets Gold Price Target: How High Could It Climb This Quarter?

Posted on by Ignacio Teson

Citi Bank expects the gold market deficit to peak during the third quarter, with the market set to weaken afterward due to a decline in investment demand.

On Monday, Citi said it anticipates gold to consolidate between $3,100 and $3,500 per ounce in Q3, as prices ease amid de-escalating geopolitical tensions in the Middle East and improving global growth prospects.

“We expect continued price consolidation (…) and maintain our view that we may have already seen the peak at $3,500/oz at the end of April, as the gold market deficit is either peaking now or will soon,” Citi stated in the note.

[[XAU/USD-graph]]

The bank added that gold prices have fallen more than $100 per ounce since it lowered its 0–3 month price target from $3,500 to $3,300 in its mid-June Q3 outlook. The metal is currently trading just below that revised target.

Gold Outlook: Citi’s Expectations

Citi expects the gold market deficit to reach its highest point during the third quarter and anticipates a weakening trend afterward, driven primarily by softer investment demand.

Looking further ahead, the bank projects that gold prices could drop back to the $2,500–$2,700 range per ounce in the second half of 2026. Citi “strongly recommends that gold producers hedge against price declines from current levels.”

Cryptocurrencies Climb Up to 2% on Trade Announcements; Bitcoin Tops $107,000

Posted on by Ignacio Teson

The crypto market remains calm as global equities hit new all-time highs following the announcement of a trade agreement between the U.S. and China.

Leading cryptocurrencies are posting gains of up to 2% amid the easing of geopolitical tensions. In this context, Bitcoin (BTC) has climbed above $107,000.

BTC was up 0.1% over the past 24 hours to $107,213, bringing its weekly gain to 3.4%. Ethereum (ETH) traded flat at $2,424.97, though it’s down 0.1% over the past seven days.

XRP (XRP) rose 0.9% to $2.14 but remains down 4.9% over the last 30 days. BNB (BNB) added 0.4% to $646.64, while Solana (SOL) jumped 1.9%, recovering from its weekly losses to reach $143.04.

Tron (TRX) climbed 0.8% to $0.2732, Dogecoin (DOGE) advanced 0.5% to $0.1613, and Cardano (ADA) rose 0.7% to $0.5586, trimming its 7-day loss to 4.0%.

[[BTC/USD-graph]]

Global Trade De-escalation Sets a Positive Tone for Crypto

The ceasefire in the Middle East and the trade pact between the U.S. and China have helped ease global tensions and created a favorable environment for the crypto market.

With that backdrop, Bitcoin appears to have a clearer path toward new highs. The cryptocurrency reached its all-time high of $111,891.30 on May 22, 2025. According to on-chain data from analytics firm Bitcoin Vector, BTC liquidity saw its first significant expansion in June after hitting a three-year low.

Although Bitcoin remains just below its record level, the firm highlighted a “constructive shift” in market dynamics, with capital “returning cautiously” and “laying the foundation for a new phase.”

Mexican Peso Rises for Fifth Straight Session, Ends Week Up 1.65%

Posted on by Ignacio Teson

The Mexican peso strengthened against the U.S. dollar for a fifth consecutive session on Friday, supported by growing bets on Federal Reserve rate cuts and optimism surrounding trade negotiations between China and the United States.

The exchange rate closed the day at 18.8529 pesos per dollar. Compared to Thursday’s official close of 18.8623, the peso appreciated marginally by 0.05%, or less than one cent, according to data from Mexico’s central bank (Banxico).

The dollar traded within a range of 18.9265 (high) and 18.8113 (low) pesos. Meanwhile, the U.S. Dollar Index (DXY)—which tracks the greenback against a basket of six major currencies—rose 0.06% to 97.35 points.

[[USD/MXN-graph]]

Trade and Monetary Policy Support the Peso

U.S. Commerce Secretary Howard Lutnick said Friday that a trade framework between Washington and Beijing had been finalized. He also noted that the Trump administration is pursuing imminent agreements with 10 major trade partners.

On the monetary front, the personal consumption expenditures (PCE) price index—the Fed’s preferred inflation gauge—rose 0.1% month-over-month in May and 2.3% year-over-year, matching expectations.

The inflation figures, combined with recent comments from Fed officials, support market expectations of 75 basis points in rate cuts this year. Those bets were further reinforced Thursday by a sharper-than-expected U.S. GDP contraction.

Risk Sentiment and Outlook

Reduced risk aversion also supported the peso this week, after President Trump announced a ceasefire between Israel and Iran. Compared to last Friday’s close of 19.1683, the peso gained 31.54 centavos—or 1.65%—over the week.

The currency continues to strengthen, with a nearly 1.9% gain over the past 30 days. With no major developments in the Middle East conflict, market attention is now focused on trade negotiations, which face a July 9 deadline.

“Given current conditions, it wouldn’t be unreasonable to see the return of a ‘super peso’—but ultimately, the market will decide,” a local trader remarked.

UBS Forecasts U.S. Stock Market Rebound in Second Half, Raises S&P 500 Outlook

Posted on by Ignacio Teson

Swiss financial services firm UBS is forecasting a recovery in U.S. equities during the second half of the year and has raised its year-end target for the S&P 500, dismissing the likelihood of an escalation in trade tensions between the U.S. and China, as well as renewed conflict in the Middle East following ceasefires on both fronts.

In a note to clients, where it maintained a “neutral” stance on U.S. equities, UBS strategists said the upcoming Q2 earnings season is likely to prove resilient to these risks. They also cited the tax and spending package currently progressing through Congress as a potential boost to corporate cash flows.

UBS raised its 2025 earnings-per-share estimate for the S&P 500 to $265, reflecting 6% growth. For 2026, the forecast was increased to $285, implying a 7.5% annual gain, according to Investing.com.

In line with this, UBS lifted its S&P 500 target to 6,200 points by the end of 2025 and 6,500 by June 2026. On Thursday, the benchmark index closed at 6,141.02, hovering near new all-time highs despite sharp volatility earlier this year.

[[SPX-graph]]

“U.S. equities continue to rebound from the tariff-driven selloff in March and April,” UBS analysts noted, adding, “We believe the recovery is justified, as most large-cap companies should be able to weather the tariffs reasonably well.”

Trump Tariffs Still a Wild Card

Nonetheless, UBS warned that stocks may still experience upside or downside volatility in the coming months, as markets respond to developments tied to President Donald Trump’s aggressive reciprocal tariff policies. The latest postponement on additional tariffs is set to expire in early July.

Analysts also noted that products affected by other existing tariffs will soon reach store shelves, potentially leading to “a slowdown in economic growth and a spike in inflation over the summer.”

“While investors have largely priced in this scenario, any data showing a sharper-than-expected deterioration could present headwinds for U.S. equities,” they cautioned.

The recent trade agreement between the U.S. and China appears to have brought renewed relief to global markets.

Cryptocurrencies Trade Lower Despite U.S.-China Deal; Bitcoin Holds Above $106,000

Posted on by Ignacio Teson

The crypto market remains calm even as global equities reach new all-time highs following the announcement of a de-escalation agreement between the U.S. and China.

Major cryptocurrencies are holding steady with limited volatility after the trade pact, in a context where risk assets globally are rallying. Bitcoin (BTC) is hovering near $107,000.

BTC is down 0.5% in the past 24 hours to $106,687, though it still posts a 2.2% gain so far this week. Ethereum (ETH) has slipped 0.7% to $2,426.67, extending a 3% weekly decline.

XRP (XRP) is the biggest loser on Friday, dropping 2.1% to $2.08 and down 8.8% over the past 30 days. BNB (BNB) is little changed at $645.39, while Solana (SOL) is down 0.5%, extending its weekly decline to 1.6% and trading at $142.44.

Tron (TRX) edged down 0.1% to $0.2715, Dogecoin (DOGE) fell 0.6% to $0.1592, and Cardano (ADA) lost 1.1% to $0.5495, extending its recent slide to 6.9%.

[[BTC/USD-graph]]

Global Trade Truce Sets Stage for Crypto Upside

The ceasefire in the Middle East and the U.S.-China trade deal have eased global tensions, creating a more favorable backdrop for cryptocurrencies.

In this context, BTC appears to have a clearer path toward new highs. It reached an all-time high of $111,891.30 on May 22, 2025. According to on-chain data from analytics firm Bitcoin Vector, Bitcoin liquidity posted its first significant expansion in June after hitting a three-year low, Criptonoticias reported.

Although BTC remains just below its record, Bitcoin Vector noted a “constructive shift” in the market, with capital “returning cautiously” and “laying the groundwork for a new phase.”