Pro-Crypto Law Clears Final Hurdle

CRYPTO
Pro-Crypto Law Clears Final Hurdle

President Donald Trump has signed a congressional resolution overturning a last-minute IRS rule from the Biden administration that would have required DeFi platforms to act as brokers, tracking and reporting user activity. This marks the first successful pro-crypto measure to pass through Congress. The resolution was supported by strong bipartisan votes in both the House and Senate, signaling growing political support for the crypto sector.

Representative Mike Carey confirmed that the IRS is now blocked from enforcing or reintroducing similar rules, thanks to the Congressional Review Act. Though the regulation was narrowly focused, its repeal is a key victory for decentralized finance and may pave the way for broader crypto-friendly legislation. The next priority in Congress is stablecoin regulation, with similar bills already passing key committees in both chambers. Trump has called for a final bill by August, and lawmakers remain optimistic about meeting that deadline.

FINANCE
Trade War Overshadows Inflation Gains

Just as Wall Street celebrated the lowest core inflation reading since 2021, markets were blindsided by a shock tariff announcement. March’s consumer price index dropped 0.1%, with core inflation easing to 2.8% annually—better than expected. But that positive momentum vanished after the White House confirmed a steep 145% tariff on Chinese imports, far exceeding earlier expectations. Stocks plunged: the S&P 500 fell 3.46%, the Nasdaq dropped 4.31%, and the Dow lost 2.5%.

Trump’s aggressive tariff move is seen as effectively shutting down trade with China, with ripple effects across major industries—Apple especially vulnerable due to its heavy reliance on Chinese production. The full inflationary impact of the tariffs won’t be reflected until the April CPI. Meanwhile, markets in Asia responded with mixed signals, gold surged, and Bitcoin saw modest gains. As businesses brace for higher costs, the fallout from the trade war could overshadow inflation wins and reshape global supply chains.

FINANCE
Tariffs Shake Wall Street Banks

Hopes for a strong year in investment banking are fading as market volatility and Trump’s 145% tariffs on China rattle Wall Street. Major U.S. banks, including JPMorgan, Wells Fargo, and Morgan Stanley, are set to report Q1 earnings Friday amid a sharp pullback in stock prices. Analysts like KBW’s David Konrad and Wells Fargo’s Mike Mayo have lowered their earnings estimates across the board, citing muted investment banking, paused IPOs, and weakened M&A activity.

Since Trump’s tariff announcement on April 2, shares of major banks have plunged—Citi is down 13%, Morgan Stanley 8%, and JPMorgan 7%. While some, like Mayo, see long-term opportunities for JPMorgan and Citi, both analysts note that uncertainty around tariffs, interest rates, and inflation is paralyzing decision-making. Despite recent weakness, Mayo maintains a positive long-term view on Citi and JPMorgan. But for now, hopes of a capital markets rebound are delayed, not dead, as Wall Street braces for Friday’s reports.

DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.