Ukraine Pitches US Free-Trade Deal for Post-War Recovery

BLS, as well as the Labor Department, which oversees the statistical agency, didn’t respond to requests for comment.

Source: Bloomberg

Atlanta Fed President Raphael Bostic has identified inflation as his primary economic concern, describing the current job market as being in a state of "low-hire, no-fire" amid ongoing uncertainty.

In a radio interview on Friday with WLRN in Florida, Bostic stressed that the central bank must remain sharply focused on taming price pressures.

Inflation Remains "Too High" for the Fed

Bostic stated that "inflation is still too high," arguing that the Federal Reserve's effort to manage prices is currently a more significant challenge than its employment mandate.

"You've got to get it under control, and we need to be laser-focused on making sure that everything we do is contributing to that," he explained.

He warned that persistent high prices are squeezing consumers and could ultimately weaken the economy in ways that become more difficult for the Fed to manage. "We still have this big concern around inflation, and we know that consumers across the spectrum are feeling the pressure of high prices," Bostic added.

Job Market Cools But Remains Stable

Bostic's comments followed the release of December's employment data, which provided new context on the state of the labor market. The report showed:

• A modest payroll gain of 50,000 jobs.

• A decline in the unemployment rate to 4.4%, down from 4.5% the previous month.

While acknowledging that labor markets have cooled, Bostic expressed some doubt that they are on a path toward significant weakness. This relative stability in hiring gives the Federal Reserve more time to deliberate before making a decision on interest rates, according to many economists.

Implications for Future Rate Cuts

The Fed's three-quarters of a percentage point in rate cuts last year was intended to support the job market while maintaining enough policy restraint to guide inflation back toward the 2% target.

Many economists still anticipate that the Fed will cut interest rates this year as price pressures ease and the effects of tariffs diminish. However, the steady employment figures reduce the immediate pressure on the central bank to act.

Housing Affordability Is a Supply Problem

When asked about a plan by President Donald Trump to direct $200 billion from government-sponsored housing companies to buy mortgage bonds, Bostic did not comment on the specific proposal.

Instead, he pointed to more fundamental issues driving housing costs. "I do think that a lot of the housing affordability challenges are about more than just financing," Bostic noted. "There's a supply and demand issue that has persisted in many major markets."

Bitcoin was trading near the $90,000 mark on Friday, finding stability after the U.S. Supreme Court delayed a key decision on Donald Trump's tariff policies, temporarily calming macroeconomic uncertainty across markets.

At the time of writing, Bitcoin's price stood at approximately $90,443, reflecting a 1% decline over the past 24 hours. Daily trading volume reached about $45 billion, while its total market capitalization fell slightly to $1.80 trillion.

Figure 1: Bitcoin's recent price chart shows tight consolidation around the $90,800 level, reacting to macroeconomic developments.

Despite the minor drop, the asset remains in a tight trading range. It is currently trading about 2% below its seven-day high of $91,839 and just 1% above its seven-day low of $89,671. Meanwhile, Bitcoin's circulating supply has reached 19,973,659 BTC, moving ever closer to its hard cap of 21 million coins—a core feature supporting its long-term value proposition.

Macro News Steadies BTC Price Above $90,000

Crypto markets initially showed signs of weakness this week as traders braced for a potential Supreme Court ruling on the legality of Trump-era global tariffs. The decision was widely seen as a major catalyst for broader market movements.

However, prices recovered on Friday after the court announced it would delay its ruling until the following week. This postponement reduced the immediate risk of market disruption, providing a lift to equities, bonds, and digital assets.

Analysts noted that the delay specifically eased concerns over a scenario where the U.S. Treasury might have to refund over $130 billion to importers if the tariffs were deemed illegal. Such an event could have created significant fiscal disruption.

The market's reaction underscores Bitcoin's growing sensitivity to macroeconomic factors, including shifts in policy expectations, liquidity conditions, and geopolitical events. While long-term adoption trends remain a primary driver, major legal and political developments continue to heavily influence its short-term price action.

Technical Outlook: Bitcoin Consolidates After January Rally

Bitcoin's current price stability represents a cooling-off period following a surge in the opening days of the year. That early-January rally boosted bullish sentiment but eventually met resistance, triggering a round of profit-taking that stalled its momentum.

From a technical perspective, traders are closely watching the $90,000–$91,000 zone as a critical area of support.

• A sustained break below this level could open the door to further downside, potentially pushing the price toward the high-$80,000 range.

• Conversely, a decisive move back above $92,000 would signal renewed strength and likely clear a path toward higher resistance levels.

For now, Bitcoin remains locked in a consolidation pattern, with compressed volatility as traders await a new catalyst to dictate the next major move.

Could the U.S. Government Become a Major Bitcoin Buyer?

Looking ahead, Cathie Wood of ARK Invest recently suggested that political dynamics could lead the U.S. government to begin actively purchasing Bitcoin by 2026. In a podcast, Wood argued that cryptocurrency has become an important political issue for President Trump, which could shape future policy.

While the United States currently holds a Bitcoin reserve composed of seized assets, Trump has pledged not to sell any of it. Wood believes the administration's stance could evolve from merely holding confiscated coins to making outright purchases for a national strategic reserve. She noted that the original goal was to acquire one million BTC.

Crypto has also grown into an organized political force, supporting Trump and engaging with the White House through donations and events. This growing influence, combined with executive orders that have already established a reserve and stockpile, sets the stage for a potential policy shift.

Wood sees direct government purchases as a potential market inflection point. With nearly 20 million of the total 21 million BTC already mined, U.S. government buying would introduce a massive new source of demand, likely having a significant positive impact on the Bitcoin price.

As of the time of writing, Bitcoin is priced at $90,814.

Recent reports suggest China is preparing to approve the import of older-generation Nvidia artificial intelligence (AI) chips, potentially reopening a critical market for the U.S. chipmaker after a previous ban.

While details are still emerging, regulators will reportedly allow sales of these AI processors to commercial and technology customers. However, significant limitations will apply. The Chinese government is expected to prohibit the use of these chips by government agencies, military operations, critical infrastructure, and state-owned businesses due to security concerns.

Figure 1: Nvidia's powerful AI processors, typically housed in data center servers like these, are at the heart of renewed trade discussions between the U.S. and China.

Sizing Up the Market Opportunity

The financial stakes for Nvidia are enormous. In calendar 2024, the last full year of sales to China, the company generated $17.1 billion in revenue from the country despite initial export restrictions on its most advanced chips. Nvidia later estimated it absorbed an $8 billion revenue hit from expanded U.S. export controls.

Nvidia CEO Jensen Huang has highlighted the "very high" demand for the company's chips in China, suggesting that approved sales could exceed $50 billion annually. This figure may even be conservative.

According to a Reuters report, Nvidia has already received orders from Chinese customers for over 2 million H200 chips, priced at $27,000 each. This alone translates to approximately $54 billion in potential revenue. After accounting for a 25% export levy payable to the U.S. government, Nvidia could still clear more than $40 billion from these existing orders.

Impact on Nvidia's Financial Outlook

Crucially, potential sales to China are not included in Nvidia's current financial guidance, meaning any revenue would represent a significant boost to its forecasts. This comes as the company already expects to generate $500 billion from its AI-focused data center processors in the six quarters ending in early 2027—a figure Huang recently hinted was too conservative.

A return to the Chinese market could dramatically alter Nvidia's financial trajectory. Here’s a breakdown of the potential impact:

• Revenue Boost: Analysts currently forecast Nvidia's revenue for next year at $320 billion. An additional $40 billion would represent a major increase.

• Earnings Per Share (EPS): With a net profit margin of 56%, a $40 billion revenue injection could potentially drive the company's EPS to $8.29.

• Stock Price: Applying Nvidia’s current price-to-earnings (P/E) ratio of approximately 46 to that new EPS figure would imply a share price of around $380—more than double its present level.

Simply put, Nvidia's reentry into the Chinese market could unlock substantial growth and deliver a windfall for its shareholders.

Japan's Finance Minister, Satsuki Katayama, is calling for a strategic alliance with the U.S. and Europe to build a new supply chain for rare earths, directly challenging China's dominance over the critical minerals.

In a recent interview, Katayama stated the goal is to establish a "market of proper democracies and market economies" for these essential materials. The issue is set to be a key topic during her upcoming visit to the U.S. for a meeting of finance ministers hosted by the Treasury Department. Discussions will focus on creating a secure rare earths network that reduces reliance on China.

The Threat of China's "Economic Weapon"

Katayama expressed deep concern over the Japanese manufacturing industry's heavy dependence on Chinese rare earths. She warned that without dismantling China's ability to monopolize and "weaponize" these metals, it would pose a "constant threat" far beyond traditional security issues.

"Predictability for businesses will become more and more limited, and they'll end up on the brink of a crisis," she explained.

This isn't a hypothetical risk. In April, Beijing restricted rare earth exports as a retaliatory measure against Washington's tariffs, leading to temporary production halts for some automakers. More recently, China curbed exports of dual-use products to Japan this past Tuesday, sparking fears that these restrictions could soon apply to rare earths.

When questioned about this possibility, Chief Cabinet Secretary Minoru Kihara declined to comment, citing a lack of clarity on the situation.

Navigating Geopolitical and Economic Risks

When asked about a potential crisis in Taiwan, Katayama noted the difficulty of outlining a response at this stage. However, she highlighted the island's critical economic role, particularly in semiconductors. "We'd have to see what the U.S.'s real intentions are," she added.

On other international matters, Katayama assessed that the recent capture of Venezuelan President Nicolas Maduro would have a limited impact on Japan. She pointed out that crude oil prices have remained stable and that Japan imports almost no crude oil from Venezuela.

Domestic Policy and Political Strategy

As Japan's first female finance minister, Katayama is a key figure in Prime Minister Sanae Takaichi's government, which advocates for a "responsible and proactive" fiscal policy.

Katayama affirmed the government's commitment to dialogue with financial markets, stating it "will not hesitate to conduct foreign exchange intervention if the need arises." She emphasized that Takaichi's administration is focused on fiscal sustainability and creating a "virtuous cycle" where investment drives earnings and stimulates consumption.

Regarding rumors of a snap election, Katayama suggested the prime minister is more focused on policy than on dissolving the lower house. Despite Takaichi's high cabinet approval ratings, support for her Liberal Democratic Party (LDP) has not seen a corresponding increase.

"It seems that just because she's in the LDP doesn't mean there's a [popularity] premium" for the party, Katayama observed. She appeared cautious about an early election, suggesting it would be better for the LDP to first fully "embody" the Takaichi government's policies.

Katayama, a former minister for women's empowerment, also touched on the need for political reform to encourage more female participation. Based on her own experiences, she recommended focusing on rule changes to make electioneering less disadvantageous for women, rather than altering electoral districts.

The United States and Venezuelan governments confirmed on Friday they are exploring the possibility of restoring diplomatic relations, signaling a potential shift in their historically strained relationship.

This development comes as a surprise, considering the Trump administration had previously stated its intent to influence Venezuela's leadership and control its oil sales following a potential removal of President Nicolas Maduro.

Demonstrators in Caracas rally in support of Venezuelan President Nicolas Maduro, highlighting the country's charged political climate.

US Delegation Arrives in Caracas

A small delegation of US diplomats and diplomatic security officials from the Trump administration arrived in Venezuela on Friday to begin discussions.

According to a statement from the US State Department, the team's primary objective is to conduct a preliminary assessment regarding the potential reopening of the US Embassy in Caracas.

Venezuela Confirms Exploratory Process

Venezuela's government officially acknowledged the US delegation's presence and announced its own intention to send a delegation to the United States, though a specific date was not provided.

In a formal statement, the government of Delcy Rodríguez confirmed it "has decided to initiate an exploratory process of a diplomatic nature with the Government of the United States of America." The stated goal of these talks is "the re-establishment of diplomatic missions in both countries."