This week the market enters a wait-and-see period ahead of the Jackson Hole meeting.

This week, the market enters a wait-and-see period ahead of the Jackson Hole meeting, with investors anticipating Powell's interpretation of the latest employment and inflation data, as well as clear guidance on future monetary policy. This will undoubtedly become an important reference for the September interest rate decision.

Last Friday, an interesting piece of information went largely unnoticed in the crypto space, namely that Democratic presidential candidate Harris officially unveiled the first clear economic policy framework - "Opportunity Economy". This is a left-leaning economic proposal aimed at reducing the cost of living for the American people through government policies in four areas: housing, healthcare, food and daily necessities, and childcare. If this proposal is implemented, it could drive the cryptocurrency market to replicate the trends of 2021, but it may also reignite inflation in the United States.

Harris's $1.7 trillion subsidy plan

As Harris officially secured the presidential candidate nomination, her momentum has clearly increased. Although polling data once exceeded Trump's, the subjectivity of polls makes them insufficient as a decisive reference. However, this does reflect the strength of Harris's campaign team, which should not be underestimated.

Harris's election team released the first clear economic policy document titled "Agenda to Lower Costs for American Families" on August 16, sparking significant controversy. The proposal, referred to as "opportunity economy," suggests that by reducing costs for American families, the middle class will gain more job and entrepreneurial opportunities, thereby stimulating overall economic vitality.

The policy primarily aims to reduce the cost of living for the American public in four areas: housing, healthcare, food and daily necessities, and child-rearing.

1. Housing: Plan to build 3 million new homes, provide down payment subsidies for first-time homebuyers, and crack down on companies and major landlords to reduce rents.

2. Medical aspect: Set a cap on insulin and prescription drug costs, accelerate negotiations for health insurance, and enhance industry competition and transparency.

3. In terms of food and daily necessities: Promote the ban on price fraud and establish rules to prevent large companies from excessively exploiting consumers.

4. In terms of parenting: tax reductions for middle-class families with children, tax credits for newborn families, and tax reductions for dual-income families.

These proposals promise to begin implementation within the first 100 days of taking office. However, the plan has sparked considerable controversy, primarily focusing on housing and food staple policies, as well as overall budget issues. Opponents argue that the radical housing policies will exacerbate the government debt crisis, while the food staple policies may violate market rules, triggering a new round of inflation.

The non-profit organization Responsible Federal Budget Committee estimates that the plan will lead to an increase in government deficits by $1.7 trillion to $2 trillion over the next 10 years. This could exacerbate the U.S. debt crisis, drive up inflation, and intensify social conflicts due to funds raised from taxes on the wealthy.

Potential Impact on the Cryptocurrency Market

Analyze the impact of this bill on the cryptocurrency market. In the short term, it may be bullish, while in the long term, it could be bearish. If the proposal is implemented, the living costs for middle-class families in the U.S. will significantly decrease in the short term, leading to an increase in disposable income. This creates conditions for the rise of risk assets, especially technology assets with high EPS.

This scenario played out in 2021. At that time, the Biden administration's $1.9 trillion COVID-19 relief package caused a surge in disposable income for American families in the short term, igniting a rally in the cryptocurrency market led by Bitcoin. However, as the wealth effect accumulated, inflationary pressures increased day by day, forcing the Federal Reserve to undergo a monetary tightening cycle lasting more than two years, resulting in a significant pullback in risk assets.

Therefore, if Harris's economic policies are implemented, they may benefit crypto assets in the short term, but in the medium to long term, one must be wary of the monetary policy risks brought about by the potential return of inflation. Of course, all of this depends on whether Harris can win the election and effectively implement the policies.