Trump’s Security Strategy: Rising Yields Could Favor Gold, Challenge Bitcoin
The White House’s new National Security Strategy signals a shift toward global fiscal expansion, a development that may unsettle crypto markets hoping for rapid interest rate cuts.
Signed by President Donald Trump, the strategy pushes an “America First” agenda. NATO allies are urged to raise defense spending to 5% of GDP, while Japan and South Korea are expected to increase their military budgets. The plan also commits to a stronger U.S. military presence in the Western Pacific, with Taiwan and Australia encouraged to boost spending.
Financing such initiatives likely means higher government borrowing, driving up bond yields, inflation, and the cost of capital, which could limit the effectiveness of central bank rate cuts. The strategy also signals an end to the “era of mass migration,” suggesting slower labor inflows and potentially sticky wages.
For investors, these conditions favor safe-haven assets like gold, which has risen 60% this year, while Bitcoin—marketed as “digital gold”—remains down nearly 5% year-to-date.
The Federal Reserve is expected to cut rates by 25 basis points to 3.5% next week, but prospects for deeper reductions appear limited.
