Crypto News: Market Update May 2025
The past month was marked by a robust labor market and mixed economic signals in the United States, amid ongoing uncertainty due to President Trump’s trade policy. Although job growth in April exceeded expectations and unemployment remained stable, the Federal Reserve warned of risks of stagflation and economic volatility. Inflation figures came in lower than predicted, which gave investors confidence, but the Fed remains cautious with interest rate changes as the impact of import tariffs continues to unfold.
May 2: Strong Job Growth in the US in April Despite Trade Uncertainty
In April, the number of jobs in the United States grew by 177,000, higher than the expected 133,000. Unemployment remained stable at 4.2%, and the broader unemployment rate slightly declined to 7.8%. Wage growth came in slightly lower than forecast. Despite uncertainty stemming from President Trump’s new import tariffs, the labor market remains resilient. Sectors such as healthcare and transportation showed the strongest growth, while government and manufacturing recorded slight losses. Due to these strong figures, markets may postpone expectations of a Federal Reserve rate cut until July. (Source: CNBC)
May 7: Fed Holds Interest Rates Amid Rising Uncertainty and Risk of Stagflation
The U.S. Federal Reserve kept interest rates unchanged in May at 4.25%–4.5%, due to increasing economic uncertainty and the risk of stagflation — a combination of high inflation and sluggish growth. The central bank warned of rising unemployment and inflation, partly due to the potential impact of President Trump’s global import tariffs. Despite a 0.3% contraction in GDP in the first quarter, the labor market remains strong. For now, the Fed maintains a wait-and-see approach, while the market anticipates rate cuts starting in July. (Source: CNBC)
May 13: Lower-Than-Expected Inflation Pushes Stocks Up and Weakens Dollar
Global stock markets rose on May 13 after data showed that U.S. inflation increased by just 0.2% in April, lower than the expected 0.3%. This gave investors confidence that inflationary pressures are easing. At the same time, the U.S. and China agreed to pause their trade war for 90 days, further supporting the markets. The S&P 500 and Nasdaq rose sharply, while the dollar fell against other currencies. Analysts expect the Federal Reserve to remain cautious with interest rate cuts. (Source: Reuters)
May 15: U.S. Producer Prices Fall Unexpectedly Due to Weak Demand for Services
In April, the U.S. Producer Price Index (PPI) unexpectedly fell by 0.5%, mainly due to lower prices for services such as airlines, hotels, and portfolio management. This is the largest decline since 2009. Year-over-year, the PPI rose by 2.4%, significantly lower than March’s 3.4%. The drop in demand is partly attributed to uncertainties caused by President Trump’s trade policy and his tough immigration stance. The figures could lead to a downward revision of the core PCE inflation forecast for April, potentially impacting the Federal Reserve’s interest rate policy. Markets now expect a rate cut in September. (Source: Reuters)
May 28: Fed Holds Interest Rates Steady and Sees Increasing Economic Uncertainty
During the meeting on May 6-7, Federal Reserve policymakers discussed the increasing risks of both rising inflation and rising unemployment, partly caused by President Trump’s uncertain trade policy. Although the most extreme tariffs were postponed shortly afterward, the minutes pointed to growing economic uncertainty and possible difficult choices for the Fed: fighting inflation or supporting growth. Unemployment is expected to rise above 4.6%, while inflation may prove more persistent. Therefore, the Fed kept interest rates steady at 4.25%-4.5% and opts for a cautious policy as long as the effects of policy changes remain unclear. (Source: Reuters)
May 30: Inflation Drops to 2.1% in April, Fed Remains Cautious Despite Tariff Pressure
The personal consumption expenditure (PCE) index, the Fed’s main measure of inflation, rose by just 0.1% in April, bringing annual inflation down to 2.1%, slightly lower than expected. Core inflation, excluding food and energy, also remained low with a 0.1% monthly increase and 2.5% year-over-year. Consumers spent significantly less and saved more, with a savings rate of 4.9%, the highest in nearly a year. Although the tariffs imposed by President Trump have not yet fully impacted prices, economists warn that core inflation could rise later this year if tariffs continue. The Fed remains cautious and is waiting to see the impact of trade policy, despite political pressure to cut interest rates. (Source: CNBC)
Conclusion
Despite resilient job growth and relatively low inflation, the economic situation remains uncertain due to trade conflicts and the potential effects of high import tariffs. The Federal Reserve is adopting a wait-and-see approach, balancing between controlling inflation and supporting growth. Markets expect rate cuts only later this year, while policymakers closely monitor developments in the labor market and price pressures. The coming months will be crucial in determining how trade tensions and the domestic economy will further evolve.
